Finance commissions ruling - live updates
We'll continue updating our live blog with the latest developments on the finance commission disclosures as more information becomes available, ensuring Autotrader partners stay informed with real-time insights. In the meantime, check out our useful resources.
Finance commissions ruling webinar
We hosted an exclusive expert panel webinar featuring Jo Davies from Auxillias, David Betteley from Asset Finance Connect, and Ian Plummer from Autotrader, who together deconstructed the announcement and provided crucial insights into what this ruling means for retailers, brokers, lenders, and the broader automotive industry.
You can watch this discussion by clicking the button below.
Supreme Court’s ruling on finance commissions - your questions answered
During the webinar, we received many questions from our audience, and we answered the most frequently asked ones in this FAQ blog. Check it out to find answers to the questions in the following themes:
Redress scheme
How to sell finance now
FCA rules
Wider implications of the ruling
Current lender status
Following the Supreme Court judgment, no lenders or brokers have stopped or paused lending activity. As we gain further clarity, we will share any relevant lender and broker updates here
What are the two types of car finance mis-selling cases currently being discussed?
Discretionary commission arrangements (DCAs).
This applies to about 40% of car finance deals, and is where brokers and dealers could increase the amount of interest they charged customers (without telling them) on Personal Contract Purchase (PCP) and hire purchase agreements up to 2021. If they did so, they got increased commission.
This is NOT the case the court the court ruled on
Commission disclosure complaints
This IS the decision the Supreme Court ruled on.
Last year, the Court of Appeal shocked many, including the regulator, the lending industry and politicians by ruling that if car finance agreements didn't tell consumers all details of commission, including the amount, in a clear and obvious way, not just buried in the small print of the finance paperwork, they were acting unlawfully.
This applies to up to 99% of car finance (so all those with DCA cases as well)
What was the outcome?
The Supreme Court ruled on three associated cases. 2 appeals were upheld (meaning the lenders were successful in their appeal and the consumers’ cases were dismissed). A third, was dismissed, meaning the Court ruled in favour of the consumer.
The issues assessed by the Supreme Court were:
Did a lack of commission disclosure constitute a bribe?
Does a retailer have a special responsibility to the consumer to act in their best interest (fiduciary duty)?
Was the amount of commission paid for a particular deal considered fair?
The outcome was as follows:
Fiduciary duty: It was found that retailers do not owe a fiduciary duty to a consumer. This means that a retailer is not obliged to act solely in the consumer’s interest.
Bribery / secret commission: because of the above finding, this claim is rejected as there is no legal basis for it.
One of the claims (Johnson vs. FirstRand), made under the Consumer Credit Act, was upheld, with the Court ruling that the size of the commission paid was unfair.
The Court pointed out that their judgment was based on the facts of this specific case.
Although the consumer was presented with the information at the time, this was not deemed sufficient.
What do we know about a Redress Scheme?
Summary from Auxillias:
The redress scheme will cover DCAs, and the FCA will also consult on which non-discretionary commission arrangements should be included.
The FCA’s redress calculation will be driven by degree of harm and the market impact, and will consider the option of payment of the commission. The FCA will also consult on whether there should be a minimum threshold for compensation eligibility.
The FCA thinks the scheme should cover complaints back to 2007 (but may be limited in its ability to cover some complaints relating to agreements closed before 2014 without treasury intervention). It is consulting with government on this.
No decision has been made on Opt-in vs Opt-out yet: this issue will be explored via the consultation.
The combination of high commission (as defined in the Johnson case) which is undisclosed is likely to take centre stage.
The total cost of redress to the market is unspecified but the FCA anticipates it being between £9bn and £18bn
The FCA currently estimates most individuals will probably receive less than £950 in compensation.
The FCA is anticipating awarding interest on compensation payments at around 3% (base rate for the relevant period + 1%).
The FCA has expressly commented that it is supportive of updated market practices on commission disclosure following the Court of Appeal judgment. So no row back from commission disclosure and consent is the clear implication.
The complaints pause is likely to be extended (the FCA is to consult on this being extended to align to scheme timetable).
When will we know the FCA’s decision on redress?
The FCA have said they intend to launch their consultation in early October, with a view to start paying compensation in early 2026.
Will retailers have to compensate consumers?
This remains to be seen until the FCA launch their consultation, however the fact that the decision found that a retailer does not owe a fiduciary duty to the consumer would make this unlikely.
Will lenders pause trading again?
We haven’t seen any sign of this so far, with lenders continuing business as usual for now.
In October, when the original Court of Appeal judgment was handed down, we saw a number of lenders pausing business in the immediate aftermath as they understood the ramifications on their processes. They’d just been told that the way in which they’d been selling finance (via retailers) was unlawful, so it stopping this was a logical thing to do.
Could some lenders go out of business?
This still remains uncertain until the full details of the redress scheme are known.
Useful resources
This section will be updated as more resources become available.
Autotrader Monthly Finance Insight July 2025 - here
Supreme Court ruling webinar (6th August) – Catch up here
Post-Supreme Court ruling FAQs answered - here
Post-Supreme Court checklist for dealers from Auxillias - here
The Supreme Court's decision overview from Auxillias - here
Supreme Court Announcement (1st August) – link here