In January 2021, the Financial Conduct Authority (FCA), acting as the regulatory body, implemented a prohibition on 'discretionary commission arrangements' (DCAs). This measure prevented lenders from permitting brokers, including car dealerships, from inflating the interest rates on car finance agreements to receive higher commissions without performing additional work. This practice was deemed unfair because consumers were not informed of the potential for negotiation, leading many to mistakenly believe the pricing was non-negotiable.

On 11 January 2024, the Financial Conduct Authority (FCA) initiated a significant investigation into the matter. The decision to undertake a public and extensive inquiry suggests that the FCA already possesses considerable evidence. The current phase involves the authority expanding its investigation on a firm-by-firm basis, leveraging its enhanced powers of investigation.

It is anticipated that upon the conclusion of the investigation (targeted for completion in September), the FCA may establish a large-scale compensation program, although there remains a slight possibility that it could reconsider and deem the issue to be less significant than initially thought. The advisable approach is to prepare for the introduction of such a scheme. We are adopting the strategy of initiating legal action early to maximize the potential amount of your claim.