Unfair Commission Claims: Were You Overcharged for Car Finance ?

Following the Supreme Court’s landmark ruling in August 2025 (Johnson v FirstRand Bank), it’s now clear that while commission arrangements in car finance are generally legal, exceptionally high commissions that weren’t properly disclosed can create an “unfair relationship” under the Consumer Credit Act 1974. If you paid significantly more than you should have due to an unfairly large commission, you may be entitled to compensation. Allegiant Finance Services can help you explore if you have a potential unfair commission claim.

What Are Unfairly Large Commission Arrangements?

Unfairly large commission arrangements occur when the commission paid to car dealers or brokers is exceptionally high relative to your loan amount or total finance charges, and this wasn’t properly disclosed to you. The Supreme Court ruling established that very high commissions can indicate unfairness, particularly when they represent:

• A significant portion of your loan advance (the Johnson case involved over 25% of the loan amount)
• A substantial percentage of your total credit charges (in Johnson’s case, 55% of the total charge for credit)
• Amounts that weren’t transparently disclosed or were hidden in complex documentation

Unlike previous legal arguments about fiduciary duties or “secret bribes,” the focus is now squarely on whether the size and disclosure of the commission created an unfair relationship between you and your lender.

Why Might You Have an Unfair Commission Claim?

The Supreme Court’s ruling in Johnson v FirstRand Bank provides clear guidance on when commission arrangements can be unfair under section 140A of the Consumer Credit Act. Key factors that could support a claim include:

• Exceptionally High Commission Payments: Where the commission represents a very large portion of your loan or credit charges
• Inadequate Disclosure: The size and impact of the commission wasn’t clearly explained to you
• Misleading Documentation: Information provided to you was confusing or didn’t properly reflect the commercial relationships involved
• Lack of Financial Sophistication: You weren’t in a position to fully understand the implications of the commission arrangement
• Hidden Commercial Ties: The relationship between your lender and dealer/broker wasn’t properly disclosed

The Supreme Court emphasised that these factors must be considered together on a case-by-case basis. Not every commission payment will be caught, but where commissions are particularly large and poorly disclosed, an unfair relationship may exist.

What the Supreme Court Ruling Means for Your Claim

The August 2025 Supreme Court decision provides crucial clarity about unfairly large commission claims:

What Changed:

• Claims based on fiduciary duties or “secret bribes” are no longer viable
• The focus is now entirely on whether an “unfair relationship” exists under Consumer Credit Act section 140A
• Very high, undisclosed commissions are a “powerful indication” of unfairness

What This Means for You:

• If you paid exceptionally high commissions that weren’t properly disclosed, you may be entitled to compensation
• Successful claims typically result in repayment of the unfair commission plus commercial interest rates
• Each case depends on its specific facts, particularly the size of commission and quality of disclosure

Compensation Available: Where an unfair relationship is established, the typical remedy is repayment of the excessive commission with interest, as awarded in the Johnson case.

How Do Unfair Commission Claims Work?

Following the Supreme Court ruling, these claims are assessed under the “unfair relationship” test in section 140A of the Consumer Credit Act. This involves examining:

• The size of the commission relative to your loan and total charges
• How the commission was disclosed (or not disclosed) to you
• Your understanding of the arrangement at the time
• The overall fairness of the relationship between you and your lender

Unlike previous commission claims that focused on the broker’s discretion to set rates, unfairly large commission claims centre on whether you were treated fairly given the size of the payments involved and the information you received.

Allegiant’s Expertise in Unfair Commission Claims

At Allegiant Finance Services, we have extensive experience with motor finance commission claims and understand the new legal framework established by the Supreme Court ruling. Our expertise includes:

• Case Assessment: We can evaluate whether your commission arrangements may have created an unfair relationship under the Johnson precedent
• Evidence Gathering: We understand exactly what documentation and information is needed to build a strong case under section 140A
• Expert Representation: Our team understands how to present unfair relationship arguments effectively to lenders and the Financial Ombudsman Service
• Proven Track Record: We have secured over £108 million in compensation – £87 million in cash, £21 million in debt deductions, since 2013

Our services include:

• Agreement Analysis: Detailed review of your finance documents to identify potentially unfair commission arrangements
• Commission Assessment: Evaluation of whether commission levels meet the threshold established in the Johnson case
• Disclosure Review: Analysis of what you were told versus what you should have been told about commission arrangements
• Claim Preparation: Professional presentation of your case using the legal framework established by the Supreme Court
• Ongoing Management: Full handling of your claim through to resolution, including escalation to the Financial Ombudsman Service if necessary

What Makes a Commission “Unfair”?

Based on the Supreme Court ruling, commissions may be considered unfairly large when they:

• Represent a significant percentage of your loan amount (the Johnson case involved over 25%)
• Form a substantial portion of your total credit charges (55% in the Johnson case) • Were not clearly and transparently disclosed to you
• Create a situation where you effectively paid far more than necessary for your finance

The Supreme Court emphasised that very high commissions are a “powerful indication” of unfairness, particularly when combined with poor disclosure practices.

Your Options for Unfair Commission Claims

If you believe you may have been affected by unfairly large commission arrangements, you have several options:

• Professional Representation: Work with experienced specialists like Allegiant who understand the complex legal framework and can build strong cases under the Johnson precedent
• Direct Complaint: Submit a complaint directly to your lender.
• Wait for FCA Scheme: The Financial Conduct Authority is consulting on a compensation scheme, but this won’t begin until 2026 and details remain unclear

Given the complexity of the “unfair relationship” test and the expertise required to present these cases effectively, many customers benefit from professional representation by specialists who understand exactly how to apply the Supreme Court’s guidance to individual cases.

Taking Action on Your Unfair Commission Claim

The Supreme Court ruling has established clear legal principles, but each case depends on its specific facts. If you took out car finance and suspect you may have paid unfairly large commissions that weren’t properly disclosed, it’s worth exploring your options.

We can help you understand if your case meets the criteria established by the Supreme Court and guide you through the process of seeking compensation.
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Our no-win, no-fee service means you can pursue your claim with confidence, you only pay a fee if your claim is successful. If unsuccessful, there is no charge. Fees range from 18-36% Incl. VAT, see fees page for details.

Disclaimer: This page provides general information about unfairly large car finance commission claims based on the Supreme Court ruling in Johnson v FirstRand Bank (August 2025). 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. Each case will be assessed on its individual facts under section 140A of the Consumer Credit Act 1974. Allegiant Finance Services Limited is authorised and regulated by the Financial Conduct Authority.