Overview

• A Supreme Court ruling narrowed broad compensation claims yet confirmed some pre-2021 agreements can still be judged unfair, preserving a route to redress.
• In Johnson v Firstrand, a 55% undisclosed commission was found to create an unfair relationship, with the lender ordered to repay the commission plus interest.
• The FCA says it will consult in October 2025 on a regulator-led scheme designed to deliver compensation beginning in 2026.
• Before the 2021 ban, discretionary commission arrangements let dealers vary interest rates in ways that increased their commission, a practice linked to alleged overcharging.
• Drivers are advised to locate their agreements, check if their lender used a DCA, and complain directly to the lender or the Financial Ombudsman Service for free, with non-DCA lenders now less likely to face successful claims.