Understanding the FCA’s Commitment to Consumer Protection

On 17 January 2025, the Financial Conduct Authority (FCA) released a letter from its Chief Executive, Nikhil Rathi, to Lord Forsyth. This letter highlights critical developments in motor finance commission rules and their enforcement.
With the 2021 ban on discretionary commission arrangements (DCAs) and strict disclosure obligations under CONC (Consumer Credit sourcebook), the FCA has reinforced its commitment to transparency and consumer protection.
The FCA’s acknowledgment of the ongoing Johnson v FirstRand Bank Ltd case, which is under Supreme Court review, underscores the evolving legal landscape for PCP claims and car finance claims. This update reflects the FCA’s focus on improving fairness in finance agreements and signals potential implications for consumers seeking compensation.
Key Takeaways from the FCA’s Letter
The FCA’s recent correspondence highlights the following:
2021 Ban on DCAs
Discretionary commission arrangements, which allowed brokers to set their commission rates, were prohibited. This ensures brokers no longer benefit at the expense of consumers.
Commission Disclosure Rules under CONC
Brokers and lenders must clearly disclose any commissions that could influence their recommendations.
Failure to do so can create an unfair financial relationship, which is central to many PCP and car finance claims.
Reference to Johnson Case
The FCA has stated its intention to review its rules following the Supreme Court’s final judgment in the Johnson case. This case has already influenced the interpretation of hidden commissions and unfair financial relationships.
How This Impacts PCP and Car Finance Claims
For consumers, the FCA’s enforcement of stricter rules means:
Greater Transparency:
Consumers are entitled to know if brokers received commissions and how these impacted their finance agreements.
Opportunities for Compensation:
If brokers or lenders failed to disclose commissions, agreements could be challenged as unfair, potentially leading to compensation.
This is particularly significant for PCP claims, as many Personal Contract Purchase agreements involve undisclosed commissions. Sentinel Legal is at the forefront of helping clients leverage these rules to challenge unfair agreements and secure compensation.
👉 Learn more about how Sentinel Legal helps clients with car finance claims.

What Should You Do If You Suspect Mis-Selling?
If you believe your PCP agreement or car finance deal was mis-sold:
Review Your Agreement:
Check for any mention of commissions or lack thereof.
Gather Evidence:
Keep records of communications with brokers or lenders.
Contact Sentinel Legal:
Our team specialises in challenging unfair agreements and securing compensation for consumers.
Don’t let hidden Car Finance commissions cost you. Start Your PCP Claim Today.
Read the Full FCA Letter
To gain a deeper understanding of the FCA’s position on motor finance commissions, you can read the full letter from Nikhil Rathi, Chief Executive of the FCA, to Lord Forsyth. The letter outlines the FCA's enforcement of disclosure rules, the 2021 ban on discretionary commission arrangements, and references the ongoing Supreme Court review of the Johnson v FirstRand case.
Frequently Asked Questions About FCA Rules and Car Finance Claims
1. What are the FCA rules on commission disclosure for car finance?
The FCA requires brokers and lenders to disclose any commissions that could influence their recommendations to consumers. Failure to do so may create an unfair financial relationship, which can be challenged by consumers.
2. How does the FCA’s letter affect PCP claims?
The FCA's letter highlights the importance of commission disclosure in PCP agreements. If brokers or lenders failed to disclose commissions, consumers could have grounds to challenge the fairness of their agreements and claim compensation.
3. Can I make a claim if commissions weren’t disclosed in my car finance agreement?
Yes, if commissions were not disclosed in your car finance agreement, you may be able to claim compensation for an unfair financial relationship. Contact Sentinel Legal for a free assessment of your case.
4. What should I do if my PCP claim is rejected?
If your PCP claim is rejected, you may still have options, such as appealing to the Financial Ombudsman Service or escalating the case to court with legal representation. Sentinel Legal specialises in helping clients appeal rejected claims.
5. What is Sentinel Legal’s role in car finance claims?
Sentinel Legal is a leading legal firm specialising in motor finance mis-selling claims. We assist consumers in identifying hidden commissions, challenging unfair agreements, and securing compensation for PCP and car finance claims.
Listen to Our Podcast with Kevin Durkin
Get expert insights into the Johnson case and its far-reaching implications. Kevin Durkin, who represented Mr. Johnson in the Court of Appeal and will continue in the Supreme Court, discusses the challenges and victories in this landmark case.
🎙️ Watch the full podcast episode here:👉 Podcast with Kevin Durkin on YouTube
Make Your Car Finance Claim Today
Live in the UK and had a car on finance?
✅ If you’ve been affected by hidden commissions or believe your agreement was mis-sold, Sentinel Legal is here to help.
Follow Sentinel Legal
Stay updated with the latest news and insights on car finance claims: