Car Finance Commission Complaint Letter: The Complete 2027 UK Guide to the 2026 FCA Redress Scheme

If you bought a car on finance in the last two decades, there is a real chance your agreement involved a commission arrangement you were never properly told about. In March 2026, the Financial Conduct Authority confirmed an industry-wide motor finance consumer redress scheme for customers who were treated unfairly between 6 April 2007 and 1 November 2024.¹ For many drivers, this could mean compensation where a dealer or broker had an incentive to place them on a more expensive finance deal.

This is one of the most important UK consumer-rights developments of the year. It combines financial regulation, consumer credit law, unfair relationship principles and complaint-handling rules. It also creates a practical question for ordinary motorists: should you wait for your lender, complain now, or challenge a decision if you disagree with it?

This guide explains what the scheme covers, how to prepare a strong car finance commission complaint letter, what evidence to include, and when to escalate matters to the Financial Ombudsman Service. It is written for consumers, not lawyers, but it references the key rules so you can understand the basis of your complaint and avoid vague template claims.

What is the 2026 motor finance redress scheme?

The FCA’s 2026 scheme is designed to compensate motor finance customers who were treated unfairly because important commission information was not disclosed. The regulator says the final scheme should put £7.5 billion back into people’s pockets, with millions of claims paid in 2026 and the vast majority settled by the end of 2027.¹

The scheme covers two periods. Scheme 1 applies to agreements from 6 April 2007 to 31 March 2014, while Scheme 2 applies to agreements from 1 April 2014 to 1 November 2024.¹ The split matters because consumer credit regulation changed in 2014 when responsibility moved to the FCA, and the earlier period may be more vulnerable to legal challenge. However, the FCA’s aim is to avoid consumers having to bring individual court claims or separate ombudsman complaints wherever the scheme can provide a consistent answer.

At the heart of the issue is disclosure. The FCA concluded that firms broke laws and rules in force at the time by failing to tell customers important information about commission arrangements.¹ The most widely discussed example is the discretionary commission arrangement, often shortened to DCA.

A discretionary commission arrangement is where the finance provider pays the dealer or credit broker a commission that is linked to the interest rate, and the broker can set or adjust that rate. In simple terms, the higher the interest rate, the more commission the broker may have received.²

The FCA banned DCAs in January 2021.² However, the new redress scheme looks backwards at agreements entered into before and after that ban where other forms of commission or tied arrangements may also have caused unfairness.

Why this matters for consumers

Car finance is often sold quickly, at the point of choosing a vehicle, and many customers focus on the monthly payment rather than the detailed economics of the agreement. A dealer may describe finance as convenient or competitive, but the customer may never know whether the dealer had a financial incentive to recommend a particular lender, rate or product.

That matters because UK consumer credit law is concerned not only with whether a customer signed a contract, but whether the relationship between borrower and lender was fair. The FCA’s policy statement refers to the unfair relationship provisions of the Consumer Credit Act 1974, particularly section 140A, which allows courts to consider whether the relationship arising out of a credit agreement is unfair to the debtor.¹ In the motor finance context, poor commission disclosure can affect whether the customer understood the broker’s incentives and whether they had a fair chance to question, compare or negotiate the deal.

The Financial Ombudsman Service has also explained that a car dealer or credit intermediary may arrange finance between the customer and a finance provider, and that the finance provider may pay commission to that dealer or broker.² If the commission structure created a conflict of interest and was not properly disclosed, the customer may have been deprived of a meaningful choice.

Who may be eligible?

The scheme is technical, and eligibility depends on the facts of the agreement. However, the FCA’s policy statement gives useful signposts. A relationship may be presumed unfair where inadequate disclosure involved one or more of the following: a DCA, a high commission arrangement, or certain contractual ties such as exclusivity or a right of first refusal.¹

There are also exclusions and exceptions. For example, the FCA says some cases may be considered fair where the commission was very low, the borrower was not charged interest, the DCA did not lead to additional commission, or the lender can prove the consumer did not suffer loss.¹ Consumers who have already had their complaint considered by the Financial Ombudsman, had a court determine the claim, or accepted redress may also be excluded from the scheme.¹

This is why a complaint letter should not simply say, “I want compensation for car finance.” It should identify the agreement, explain why you believe commission disclosure was inadequate, ask the lender to check whether the agreement falls within the FCA scheme, and request a full explanation of any decision.

Should you complain now or wait?

The Financial Ombudsman’s current consumer guidance says that, because the FCA has given lenders time to put the scheme in place, it may take a few months before customers find out whether they will be awarded redress. It also says consumers should wait until they hear from their lender before bringing a complaint to the ombudsman where the matter may be covered by the scheme.²

That does not necessarily mean doing nothing. If you have not complained to your lender but intend to, the ombudsman says you still have time to complain to them.² The FCA policy statement also says people who complain after the implementation period ends should be told whether they are owed money and how much within three months of their complaint, and that anyone not contacted has until 31 August 2027 to make a claim.¹

For many consumers, the sensible approach is to gather documents now and send a concise, accurate complaint to the lender or finance provider if you have not already done so. If you have already complained and your lender paused the complaint under temporary rules, the ombudsman says you should wait to hear from the lender, who will tell you whether the complaint is covered by the scheme.²

Evidence to collect before writing

A good complaint is not aggressive; it is organised. Lenders will be dealing with large volumes of cases, and clear information helps prevent delays. Before writing, gather the finance agreement, vehicle order form, dealer invoice, pre-contract credit information, emails or text messages from the dealer, settlement statements, payment history and any previous complaint correspondence.

If you no longer have the documents, your complaint can ask the lender to identify the agreement using your name, previous address, registration number, approximate purchase date and dealership. You can also ask for copies of commission disclosures or records showing the commission arrangement. Keep the request focused. The goal is to obtain enough information for the lender to assess the scheme correctly, not to bury the complaint in unnecessary background.

Car finance commission complaint letter template

Use the following template as a starting point. Replace the bracketed sections with your details and keep a copy of everything you send.

Subject: Formal complaint about motor finance commission disclosure

Dear [Lender/Finance Provider],

I am writing to make a formal complaint about the motor finance agreement connected with my purchase of [vehicle make/model/registration] from [dealer name] on or around [date]. My agreement number is [agreement number], if known.

I am concerned that the agreement may have involved a commission arrangement, discretionary commission arrangement, high commission arrangement, or tied lender arrangement that was not clearly and fairly disclosed to me before I entered into the finance agreement. I was not given a clear explanation of whether the dealer or broker would receive commission, how that commission was calculated, whether it could affect the interest rate or total cost of credit, or whether the dealer had a financial incentive to recommend this finance product.

Please assess my agreement under the FCA’s motor finance consumer redress scheme and confirm whether it falls within the relevant scheme period. Please also provide a clear explanation of the commission arrangement that applied, the disclosures made to me at the time, whether you consider the relationship to have been unfair, and how any redress has been calculated.

If redress is due, I request payment of the appropriate compensation, including any compensatory interest required under the scheme. If you decide that no redress is due, please explain the specific rule or evidence you rely upon, including any exception, limitation argument, or finding that there was no relevant arrangement.

Please treat this as a formal complaint and respond in writing. If you believe another firm is responsible for assessing the complaint, please forward it promptly and tell me who is dealing with it.

Yours faithfully,
[Your full name]
[Your address]
[Your email/phone]

Example: how a strong complaint differs from a weak one

A weak complaint says: “I heard about car finance compensation. Please pay me what I am owed.” That may be enough to alert a lender, but it does not help the consumer if the lender rejects the case or asks for more information.

A stronger complaint says: “My car was financed through a dealer in 2018. I was not told the dealer might receive commission linked to the interest rate or that the finance recommendation could be affected by commission. Please assess the agreement under the FCA scheme, identify the commission arrangement and provide a written redress determination.” This version is more precise, ties the complaint to disclosure and asks for the decision the consumer needs if they later disagree.

What if the lender rejects your complaint?

A rejection is not always the end of the matter. Under the scheme process, firms may issue a provisional redress decision or a redress determination. The FCA materials indicate that consumers may have a period to respond, and that firms must explain the reasons and evidence relied upon.¹ If you receive a decision and disagree with it, read the letter carefully before replying.

Your response should identify the exact point you dispute. For example, you might say the lender has relied on an exception without explaining the evidence, failed to identify the commission arrangement, used the wrong agreement date, ignored a previous address that would help trace the account, or failed to explain how the redress figure was calculated.

Short objection wording: “I disagree with the provisional redress decision because it does not explain what commission arrangement applied, what disclosure you say was made, or why you consider the agreement outside the FCA scheme. Please review the decision, provide the evidence relied upon, and issue a revised decision or redress determination.”

Where the Financial Ombudsman can consider a complaint, it will usually look at whether the firm applied the scheme rules correctly rather than simply substituting a broad fairness view for every scheme case.¹ The ombudsman’s own guidance also tells consumers not to refer matters prematurely and to wait for the lender where the scheme is still being implemented.²

How does this compare with ordinary consumer rights?

Many people associate “consumer rights” with faulty goods, refunds and the Consumer Rights Act 2015. That Act remains crucial for everyday purchases because goods must be of satisfactory quality, fit for purpose and as described. However, motor finance commission complaints are primarily about financial services and consumer credit, so the most relevant framework is the Consumer Credit Act 1974, FCA rules and the Financial Ombudsman process.

That distinction matters when writing. If the car itself was faulty, your complaint may involve the dealer, the finance company and rights under the Consumer Rights Act 2015. If the issue is undisclosed commission, the complaint is about the fairness and disclosure of the finance arrangement. Some cases involve both, but it is usually better to separate the issues clearly so the lender cannot misunderstand what you are asking it to investigate.

Avoid these common mistakes

The first mistake is paying a claims management company without understanding what it will do. The FCA has emphasised that consumers do not need a professional representative to use the scheme and that accessing the Financial Ombudsman is also free for consumers.¹ Some representatives may add value in complex cases, but fees can reduce the compensation you receive.

The second mistake is ignoring letters from your lender. If a lender sends an opt-in invitation, provisional decision or request for information, there may be a deadline. Put the date in your calendar, reply in writing and keep proof of submission.

The third mistake is sending an emotional complaint with no agreement details. Frustration is understandable, but complaint handlers need facts. Provide your agreement number if you have it, or enough tracing details if you do not.

The fourth mistake is treating an ombudsman referral as the first step. In most cases, complain to the firm first and allow the scheme process to operate. The ombudsman is important, but it is usually a route for unresolved disputes, incorrect decisions or cases where the firm has failed to follow the correct process.

Final checklist before sending your letter

The bottom line

The 2026 FCA motor finance redress scheme gives millions of UK drivers a structured route to challenge unfair commission disclosure without immediately starting court proceedings. It is not a guarantee that every borrower will receive compensation, and it is not the same as a normal faulty-car complaint. But if you financed a car through a dealer or broker between 2007 and 2024, it is worth checking whether the agreement may have involved undisclosed commission, a DCA, a high commission arrangement or a tied lender arrangement.

The strongest complaint letters are calm, specific and evidence-led. They identify the agreement, explain the disclosure concern, ask for assessment under the FCA scheme, request compensation and interest where due, and require the lender to explain any refusal in writing.

If you want to make sure your complaint is clear, properly structured and tailored to your circumstances, LetterForce can help you generate a professional complaint letter in minutes. Enter the key details of your finance agreement, explain what happened, and LetterForce will produce a polished letter you can send to the lender with confidence.

Footnotes

1. Financial Conduct Authority, PS26/3: Motor Finance Consumer Redress Scheme, March 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹²

2. Financial Ombudsman Service, Complaints about car finance commission, last updated 30 March 2026. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷