Good to know: We are a Claims Management Company (CMC). You do not need to use a CMC to make your complaint to your lender, bank or insurer. If your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free if the firm is still trading. For eligible failed firms, you can refer a claim to the Financial Services Compensation Scheme for free.
Did you take out a Personal Contract Purchase (PCP) or Hire Purchase (HP) deal with Black Horse before 28 January 2021? You could be owed substantial compensation due to hidden commission practices that increased your repayments without your knowledge.
PCP deals became incredibly popular as they offered an affordable way to drive newer vehicles. However, behind the attractive monthly payments were hidden commission arrangements, known as Discretionary Commission Agreements (DCA). These allowed dealers to inflate interest rates secretly, increasing their profits at your expense.
Under these arrangements, dealerships could discreetly adjust the interest rate of your finance deal. Higher interest meant higher commission for the dealer, often resulting in customers unknowingly paying hundreds or even thousands extra over the term of their loan. Black Horse, as a major lender, was heavily involved in these practices.
The Financial Conduct Authority (FCA) banned discretionary commissions from January 2021, recognising they were unfair to consumers. This regulatory action opened the door for affected customers to reclaim money they should never have paid.
The FCA’s ongoing investigation is expected to finalise by May 2025, potentially resulting in a formal compensation scheme. However, you don’t need to wait—you can start your claim today.
If any of the following apply, you may be eligible to claim compensation:
Here’s what you need to do:
You can handle the claim yourself, or use a claims specialist like Allegiant Finance Services to simplify the process and maximise your chance of success.
Compensation varies based on your specific deal, including factors like car price, agreement length, and extra interest charged. Many customers receive around £1,500, but some settlements can be significantly higher.
If you had a PCP or HP agreement with Blackhorse before 28 January 2021, check your eligibility today. It costs nothing to investigate your potential claim. Take action now and reclaim money that is rightfully yours, ensuring fairness and transparency in your financial agreements.
Stephen is our Head of Product, with a steadfast dedication to consumer justice and thought leadership . In his early years, Stephen was a Complaints Handler at Lloyds Banking Group. Stephen then worked at the Financial Ombudsman Service for over 10 years in various roles, including Quality Auditor. Stephen ensures Allegiant provides top tier claims handling for our customers.
Black Horse, a subsidiary of Lloyds Banking Group, is under scrutiny for using Discretionary Commission Arrangements (DCAs) in car finance deals before January 2021. These DCAs allowed brokers to increase interest rates to earn higher commissions, often without informing customers. The Financial Conduct Authority (FCA) banned this practice in 2021 and is currently investigating its past use. A Supreme Court ruling expected in July 2025 may lead to a formal redress scheme, potentially resulting in refunds for affected customers.
Not yet. The FCA has paused complaint responses involving DCAs until after December 4, 2025, pending the outcome of the Supreme Court ruling. However, Black Horse has acknowledged the use of DCAs in some agreements and has set aside funds in anticipation of potential compensation pay outs.
Compensation amounts vary based on individual agreements. Generally, it would cover the difference between the interest you paid and what you would have paid without the inflated rate, plus 8% statutory interest. For example, a customer overcharged by £1,147 received that amount back, along with additional interest.
ayouts are contingent on the FCA’s decision following the Supreme Court ruling expected in July 2025. If a redress scheme is established, compensation could be distributed after December 4, 2025. The FCA aims to make the process straightforward and may implement an opt-out model to expedite payments.
Black Horse is under regulator scrutiny for its use of Discretionary Commission Arrangements (DCAs) in car finance agreements prior to January 2021. In a nutshell, these arrangements allowed brokers to increase interest rates on loans, thereby earning higher commissions, often without the customer’s knowledge. This practice created a conflict of interest, as brokers were incentivised to prioritise their earnings over securing the best rates for consumers.
The Financial Conduct Authority (FCA) banned DCAs in 2021 and is currently investigating their historical use. A Court of Appeal ruling in 2024 deemed such undisclosed commissions unlawful, a decision now under appeal at the Supreme Court. The FCA has paused complaint responses involving DCAs until after December 4, 2025, pending the outcome of the Supreme Court ruling. If a redress scheme is established, compensation could be distributed after this date.
The FCA estimates that around 40% of car finance deals may have been affected before 2021.
In this blog, our Head of Product, Stephen Griffiths, explores the main two branches of commissions associated with car finance.
View nowWe take a look at the essentials all UK drivers should know about vehicle hidden commission claims.
Learn nowLearn about the humble beginnings of the UK’s largest financial scandal since PPI.
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Good to know: We are a Claims Management Company (CMC). You do not need to use a CMC to make your complaint to your lender, bank or insurer. If your complaint is not successful you can refer it to the Financial Ombudsman Service yourself for free if the firm is still trading. For eligible failed firms, you can refer a claim to the Financial Services Compensation Scheme for free.
