Motor Finance Commission Complaints and Compensation

There have been reports of scammers contacting customers about motor finance compensation.

Be careful if someone contacts you unexpectedly and asks for personal or banking information.

We’ll never ask you for your PIN, password or full online banking security details.

If we need bank details to make a compensation payment, we’ll explain how to provide them securely.

If you’re unsure whether a communication claiming to be from Toyota  Financial Services is genuine, don’t use the contact details provided in that communication. Contact us using the details shown on our official website.

• Financial Conduct Authority (FCA): The FCA is the organisation that regulates financial services in the UK. Its role is to make sure firms treat customers fairly, provide clear information, and sell products that are right for their needs.
• Commission Models: A commission model is the way a dealer or broker is paid by a lender when arranging finance for a customer. It explains how commission is calculated and when it is paid.
• Discretionary Commission Agreements (DCA): Discretionary Commission was a type of commission where a dealer or broker could set or change the interest rate a customer paid. The amount of commission a dealer received depended on the rate they selected. This model is no longer allowed by the FCA.
• Non-Discretionary Commission Agreements (Non-DCA): This is a type of commission where the dealer or broker cannot change the interest rate to affect the amount of commission they receive. The commission is set in advance by the lender and does not depend on or impact the customer’s rate.

Parts of the FCA’s motor finance compensation scheme are currently suspended pending the outcome of a legal challenge.

Three Motor Finance lenders, Volkswagen , Mercedes and CA Auto Finance  are challenging the FCA’s motor finance redress scheme via a Judicial Review hearing in the courts.

A hearing will take place in December 2026 or February 2027. Because of this development, there will be a delay in resolving customer complaints. The FCA has said we should continue preparing for some elements of the proposed scheme, but that the scheme timetable may need to change while the legal challenges are ongoing.

At the moment, there are several possible outcomes detailed below: 

1. The legal challenges aren’t successful, and the original scheme goes ahead as planned. The FCA has said customers shouldn’t expect any redress payments before 2027.
2. The courts decide that some or all of the original scheme needs further review. The FCA will decide what happens next. If that happens, the FCA could: 
   • Introduce a revised redress scheme. If this happens, the FCA has said customers aren’t likely to receive payments before the second half of 2027 and perhaps not until early 2028;
   • or move to a no scheme complaints-led approach.

We will continue to post further updates once more information becomes available from the FCA.

What this means for you

If you have already made a complaint to Toyota Financial Services, you do not need to take any action at this time.

When a dealer or broker arranged motor finance for a customer, the lender may have paid them commission for arranging the finance.

There were different ways this commission could be calculated.

The FCA’s compensation scheme looks at certain commission arrangements and whether customers were given enough information about them when they took out their finance.

No.

Commission was commonly paid when motor finance was arranged and the fact that commission was paid doesn’t automatically mean you were treated unfairly or that compensation is due.

The FCA has set rules that lenders must use to decide whether an agreement is eligible for compensation.

You may be covered if:

• you took out motor finance between 6 April 2007 and 1 November 2024;
• your agreement was a type covered by the scheme, such as Hire Purchase (HP) or Personal Contract Purchase (PCP); and
• certain commission arrangements applied and you weren’t given the information required about them.

There are also some circumstances where an agreement isn’t covered. We’ll consider the details of your agreement against the FCA’s rules, so you don’t need to work this out yourself before contacting us.

The FCA’s scheme considers certain arrangements that weren’t properly disclosed to customers. These include:

Discretionary Commission Arrangements (DCA) – where the broker could adjust the interest rate and this could affect the commission they received.

High commission arrangements – where the commission was at least 10% of the amount borrowed and at least 39% of the total cost of credit.

Certain contractual ties – for example, where a broker only used one lender or gave one lender the first opportunity to provide the finance. There are exceptions to this, including certain circumstances where there were clear links between the lender, manufacturer and franchised dealer.

You don’t need to know which type of arrangement applied to your agreement. We’ll check the information we hold when we review your complaint.

Personal Contract Purchase (PCP) and Hire Purchase (HP) agreements may be covered if they meet the FCA’s eligibility criteria and were entered into between 6 April 2007 and 1 November 2024.

Being within these dates doesn’t automatically mean compensation is due. We’ll assess each relevant agreement against the FCA’s rules.

No. Personal Contract Hire (PCH), sometimes referred to as leasing, isn’t included in the FCA’s Motor Finance Compensation Scheme.

If you have made a complaint about commission relating to a PCH agreement, we’ll consider it through our usual complaints process where appropriate.

We may not be able to find your agreement if:

• You’ve moved house or changed your name.
• The agreement is more than six years old.
• The information provided by you does not match our records.

To help us find your agreement, please provide:

• Agreement number or vehicle registration.
• Date of birth.
• Full name (as at the end of the agreement).
• Address and postcode (as at the end of the agreement).

Yes. Your agreement doesn’t need to be active now.

If your agreement was entered into during the relevant period and meets the FCA’s other eligibility criteria, it may still be covered.

Yes. You don’t need to still own the vehicle.

Eligibility is based on your finance agreement and the circumstances when it was arranged.

Each finance agreement is considered separately because different commission arrangements or eligibility rules may apply.

Please provide as much information as you can about the agreements you want us to look at. We’ll use the information available to us to identify and review the relevant agreements.

High-value loans are agreements where the loan value exceeds the threshold for the year in which your agreement was entered into, as set out in the table below.

Such agreements are not covered by the Scheme. However, agreements used to purchase vehicles modified for accessibility purposes remain in the Scheme regardless of loan value.

NOTE: Please note, that if your agreement started before 6 April 2008 and the amount of credit amount was more than £25,000, it is not covered by the Scheme. This is because agreements like this were not classed as regulated motor finance agreements at that time.

You can still make a complaint to us, which we’ll consider under the usual complaints handling rules. 

This will depend on your individual circumstances and the outcome of the legal challenge to the FCA’s scheme.

Until the legal process has ended, lenders don’t need to calculate or pay compensation to customers who may be eligible.

Some parts of the scheme haven’t been suspended. This means we may be able to tell some customers that their agreement isn’t eligible for compensation before the legal challenge has ended.

If we’re able to give you an outcome, we’ll contact you and explain our decision.

We’ll update this page when the FCA provides further information about the timetable.

If we tell you in our provisional decision that your agreement isn’t eligible for compensation and you believe we’ve made a mistake, please contact us within 1 month and ask us to review our decision.

If you’re still unhappy after we’ve reviewed it and have sent you a redress determination letter, you may be able to ask the Financial Ombudsman Service to consider your complaint.

The Financial Ombudsman Service is free to use.

We’ll explain your rights and any relevant time limits in the communication we send you.