Complaints About Commission Models

Following the recent Supreme Court judgment and the FCA’s announcement that it will consult on a possible motor finance redress scheme, there have been industry-wide reports of scammers contacting customers and requesting personal information including names, addresses, dates of birth and banking information.

 

These scammers may pretend to be from lenders and claim that they need this information to process redress payments.

 

We are not currently contacting customers about motor finance compensation claims, and we will never ask for you to confirm banking information over the phone. If someone calls claiming to offer compensation, you should hang up immediately.

• 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.

On 30 March 2026, the Financial Conduct Authority (FCA) confirmed new rules for motor commission finance redress schemes.

 

The two schemes proposed are:

 

1. Agreements that started between 6 April 2007 to 31 March 2014
2. Agreements that started between 1 April 2014 to 1st November  2024

 

On 2 July the FCA announced that parts of its motor finance compensation scheme are now 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.

Before 28 January 2021, some lenders allowed brokers (such as car dealers) to set the interest rate given to customers on car finance. The broker’s commission depended on the rate, and higher interest rates sometimes meant higher commission. This is known as a Discretionary Commission Arrangement. The FCA banned this practice in 2021.

A Non-Discretionary Commission Arrangement is a fixed commission. The broker or dealer cannot change the interest rate you pay. Commission may be a fixed amount or a percentage of the amount borrowed and is set in advance by the lender.

You may have an eligible complaint if you entered into a Toyota Personal Contract Purchase (PCP) or Toyota Hire Purchase (HP) agreement between 6 April 2007 and 1 November 2024. We will review all relevant agreements in line with the FCA’s rules and following the outcome of the legal challenge.

Personal Contract Hire agreements are not covered by the redress scheme. We’ll continue to handle these complaints through our usual process.

Because of the suspension of the scheme due to the court review, at this time we are not required to issue final responses to complaints about either DCA or Non-DCA complaints.

 

Toyota Financial Services will provide further details on this webpage as matters develop.

If you have previously submitted a complaint to us, you do not need to take any action at this time. We will provide further updates on this page in line with updates provided by the FCA.

 

Does this apply to new and used vehicles?

 

Yes, this applies to both new and used vehicles. 

The FCA’s review of Discretionary Commission Arrangements covers Hire Purchase (HP) and Personal Contract Purchase (PCP) agreements.

 

The FCA’s review of Non-Discretionary Commission Arrangements covers Hire Purchase (HP) and Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) agreements.

 

If I log a commission complaint, when will I get a final decision from you?

 

If you submit a relevant complaint, you will receive a final response from Toyota Financial Services after the FCA’s response pause has ended.

 

The pause is currently due to end on the 31 May 2026.

 

The FCA has taken this step to ensure complaints are dealt with consistently by all motor finance providers. 

Yes. The normal time limits have been extended and how long you have depends on when you receive your final response letter and which type of commission model applied to your agreement.

 

Your final response letter will tell you whether your agreement had a Discretionary Commission Arrangement or a Non-Discretionary Commission Arrangement.

 

If your agreement had a Discretionary Commission Arrangement:

• Final response received between 12 July 2023 and 29 April 2025 - you have until 29 July 2026 to take your complaint to the Ombudsman.
• Final response received between 30 April 2025 and 29 January 2026 - you have 15 months from the date of the letter.

 

If your agreement had a Non-Discretionary Commission Arrangement:

• Final response received between 21 June 2024 and 29 April 2025 - you have until 29 July 2026.
• Final response received between 30 April 2025 and 29 January 2026 - you have 15 months from the date of the letter.

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).

You should check your contract with the claims management company to see what it says about termination and your right to withdraw from the agreement. We will continue to correspond with the claims management company you have instructed until we receive confirmation from them that you have terminated your agreement. Once we receive this, we will update our records and contact you directly.