How to claim compensation for mis-sold DCAs in car finance

In January 2021, the Financial Conduct Authority (FCA) banned DCAs in motor finance agreements. DCAs were a hidden type of commission that allowed dealers and brokers to increase the commission they earned by charging customers more.

In January 2024, the FCA started an investigation to decide if affected customers should be paid compensation.

The FCA says it will provide details of a redress scheme for DCA complaints in October 2025.

You could be due compensation if: 

• you took out motor finance before 28 January 2021 (including cars, vans, campervans and motorbikes) 

• your agreement was either a Personal Contract Purchase (PCP) or Hire Purchase (HP) 

• your vehicle was bought for personal use  

• your agreement included a DCA, and it wasn't properly disclosed to you.

If possible, you should look through your car finance paperwork to see if your agreement included a DCA. If you’re not sure, you can ask your lender.

If your lender won’t tell you, you can still complain. It’ll be up to your lender to investigate whether your agreement included a DCA. 

Some firms have claimed that they never used DCAs. You can see a list of companies not using DCAsOpens in a new window on MoneySavingExpert.

It’s not yet known exactly how much customers will receive if they’re owed compensation. It will depend on what the FCA announces in October 2025.  

In its latest information, the FCA has said most customers will receive less than £950 in compensation. 

You might still be able to get compensation, if your agreement included undisclosed commission. But it’s not yet clear who will be eligible – more details will be announced by the FCA in October 2025.

Check our guide Complaints about undisclosed commissions in car finance to see if you could still make a complaint.

The FCA have said that if compensation is due, it’s likely to be given through a redress scheme. This would mean that if you’re owed money, you won’t need to complain – it'll be up to the car finance company to reach out and pay you.

But this isn’t confirmed. Making a complaint now won’t hurt your chances of getting compensation.

Either way, avoid using a claims management company to get any compensation you’re owed. 

If you’re thinking of complaining, it’s a good idea to use a free template letter so that you don’t need to pay a claims management company.

There are free templates you can use to complain on:

• MoneySavingExpertOpens in a new window

• Which?Opens in a new window

Gather any information about your car finance.  Then complain to your lender, ideally in writing. 

You’ll need to complain to the firm you were paying each month. If you’re not sure who that is, you can check your credit report (if the agreement was active in the past six years) or old bank statements if you have them.

Tell the lender you think you’ve been overcharged and include as much information as you have. 

You should get a response from the lender to confirm that they’ve received your complaint within a few weeks. If you don’t hear anything, contact the firm again to check if they received it.

Ideally, your lender will then respond to let you know if you had a DCA. However, the FCA has given firms extra time to respond to complaints, so you might not hear back for a while.

What you do next depends on the response you get:

• If your agreement had a DCA, you don’t need to do anything more for now – when the FCA decides on compensation, your lender should process this for you.

• If your agreement didn’t have DCA, you might still be able to complain about undisclosed commission – check our guide on complaining about car finance commission.

• If your lender doesn’t give you any further response, don’t worry. As long as your complaint has been acknowledged, if the FCA decides you are due compensation this should be processed by your lender.

You can get step-by-step information about when you can expect a response by using the FCA’s car finance complaint toolOpens in a new window

If you don’t get any response at all, or you disagree with the lender’s response regarding DCA,  you can take your complaint to the free Financial Ombudsman Service (FOS)Opens in a new window

Once your complaint has been logged (either by your lender or the FOS), you won’t need to do anything more for now. 

What happens next depends on what the FCA announces in October 2025.

The FCA has extended the time which lenders have to respond to complaints. 

• If you complained before 17 November 2023 – you should have received a response within eight weeks of submitting your complaint. If you didn’t, you can take your complaint to the Financial Ombudsman ServiceOpens in a new window

• If you complained on or after 17 November 2023 – the usual eight week timeframe has been paused until 4 December 2025. This means that your lender has until at least then to respond.

Your lender should still confirm that they’ve received your complaint, and you could get a response before the deadline.

If your complaint is rejected by the lender or you’re unhappy with the response, you have the option of taking your complaint to the free Financial Ombudsman Service (FOS)Opens in a new window

How long you have to take your complaint to the FOS depends on when you originally complained:

• If you complained before 17 November 2023 – you’ll need to complain to FOS by the date given in the final response you received. If you didn’t get a final response, you can still take your complaint to FOS.

• If you complained on or after 17 November 2023 – you’ll need to complain either by 29 July 2026 or 15 months after receiving your final response, whichever is later.