While much of the focus on car finance mis-selling has been on Discretionary Commission Arrangements (DCAs), it’s important to understand that issues can also arise from non-discretionary car finance commission claims. Even if your finance agreement didn’t involve a DCA, you might still have grounds for a complaint if other types of commission, such as fixed-rate or flat-fee commissions, were not clearly disclosed to you, or if the arrangement was otherwise unfair. Allegiant Finance Services can help you explore if you have a potential car finance commission claim (non-DCA).
What Are Non-Discretionary Commission Arrangements?
Non-discretionary commission arrangements in car finance are those where the amount of commission paid to the car dealer or broker by the lender is pre-set and not variable based on the interest rate charged to the customer. Common types include:
- Fixed Rate Commission: The broker receives a set percentage of the loan amount as commission.
- Flat Fee Commission: The broker receives a fixed monetary amount for each finance agreement they arrange.
Unlike DCAs, the broker does not have the discretion to alter your interest rate to increase their commission under these models. However, this doesn’t mean that issues cannot arise, particularly around transparency and informed consent.
Why Might You Have a Non-Discretionary Commission Claim?
The primary basis for complaints about non-discretionary car finance commission often revolves around a lack of transparency. The Financial Conduct Authority (FCA) and UK consumer law emphasize the importance of customers being given enough clear information to make informed decisions. If you were not made aware that the dealer or broker was receiving a commission for arranging your finance, or if the details of that commission were hidden or unclear, you may have been disadvantaged.
Key reasons for a potential non-discretionary car finance commission claim include:
- Lack of Disclosure: You were not told that a commission would be paid to the dealer/broker by the lender for arranging the finance.
- Unclear Information: Even if commission was mentioned, it might have been buried in complex jargon within the terms and conditions, making it difficult to understand its impact.
- Impact on Impartiality: The existence of a commission, even a fixed one, could still influence the broker’s advice or the range of finance options presented to you. If this wasn’t clear, you might not have received truly impartial guidance.
- Unfair Relationship: Some legal arguments suggest that if a broker is acting for you, they have a duty to disclose any commission they earn, as it could create a conflict of interest or an unfair relationship.
The Court of Appeal ruling in October 2024 (Johnson and others), while primarily focused on DCAs, also reinforced the principle that it could be unlawful for brokers to receive any commission from a lender without the customer’s fully informed consent. This principle could extend to undisclosed fixed commission car finance or flat fee car finance commission issues.
How Do Non-DCA Claims Differ from DCA Claims?
While both types of claims relate to commissions in car finance, the core issue in DCA claims is the discretion the broker had to set your interest rate to increase their own commission. For non-DCA claims, the focus is more on whether the existence and nature of the (pre-set) commission were adequately disclosed to you, allowing you to make a fully informed decision.
If you are wondering, “Can I claim if my car finance commission wasn’t a DCA?” the answer is potentially yes, if there were issues with transparency or fairness.
Allegiant’s Role in Your Non-Discretionary Commission Claim
At Allegiant Finance Services, we understand the nuances of different types of car finance commission issues. If you believe you were not properly informed about a non-discretionary commission on your car finance agreement, we can help you investigate and pursue a claim.
Our services include:
- Agreement Review: We will examine your finance documents to understand the commission structure involved.
- Information Gathering: We will help you gather any relevant information about what you were told (or not told) at the time of sale.
- Claim Management: We will prepare and submit your complaint to the lender or broker, outlining the reasons for your claim.
- Guidance and Support: We will keep you updated throughout the process and advise on next steps, including escalation to the Financial Ombudsman Service if appropriate.
It’s important to know that you can also make a complaint directly to the lender or broker yourself, and if you’re not satisfied with their response, you can take your case to the Financial Ombudsman Service for free. If you choose to use our services, we typically operate on a no-win, no-fee basis (terms and conditions apply and will be clearly explained).
Exploring Your Options for Non-Discretionary Commission Claims
If you took out car finance and are unsure about the commissions involved, or if you feel you weren’t given the full picture, it’s worth exploring your options. The regulatory environment is increasingly focused on ensuring fairness and transparency for consumers.
Contact Allegiant Finance Services today for a free, no-obligation discussion about your potential
non-discretionary car finance commission claim. We can help you understand if you have grounds for
claiming for unfair non-DCA commission.
Disclaimer: This page provides general information about non-discretionary car finance commission claims. It does not constitute financial or legal advice. The outcome of any claim is subject to the specific circumstances of your case and the decisions of lenders, the Financial Ombudsman Service, or the courts. Allegiant Finance Services Limited is authorised and regulated by the Financial Conduct Authority.
