Is a Discretionary Commission Arrangement (DCA) still mis-sellable if it pre-dates the FCA ban?

Yes. The FCA ban on Discretionary Commission Arrangements took effect on 28 January 2021 under FCA Policy Statement PS20/8. Discretionary commissions arranged BEFORE that date were retrospectively mis-sold where they created a conflict of interest that incentivised the broker or lender to inflate the customer interest rate and push the price above the rate the lender would have offered on a flat-fee basis. Affected agreements can be raised to the lender's formal complaint route and, if no substantive response, to the Financial Ombudsman Service free of charge.

What makes a PCP agreement unaffordable?

A PCP (Personal Contract Purchase) agreement becomes unaffordable where the monthly payments and the balloon / final payment were not sustainable from the customer's documented income and committed expenditure at the time of agreement, where the broker or lender failed to conduct a proper affordability assessment under FCA Principle 6 (Customers' interests) and CONC 5.5 (Responsible lending), or where the final 'balloon' payment was disproportionate to the income declared on the credit application. The dominant PCP mis-sell complaint category by volume in the current FCA / FOS redress exercise relates to balloon / final payment unaffordability negotiated on commission-incentivised rates.

What is a Discretionary Commission Arrangement (DCA)?

A Discretionary Commission Arrangement is an agreement between a car finance broker / dealer and a lender that the broker could discretionarily set, or vary within a margin, the interest rate offered to the consumer. The broker's commission was linked to the rate charged, which gave the broker an incentive to push customers towards higher rates than the lender's 'flat' rate. The FCA banned the practice entirely from 28 January 2021 (FCA Policy Statement PS20/8). Complaints about DCAs arranged before the ban can be brought to the lender's formal complaint route and escalated to the Financial Ombudsman Service free of charge.

What is the Consumer Credit Act 1974 s.19 'duty to supply executed agreement'?

Section 19 of the Consumer Credit Act 1974 requires the creditor (lender) to supply the debtor with a copy of the executed agreement (the document the debtor has signed) within seven days of the making of the agreement; a copy of any security instrument; and, on request, a statement of account. Section 19(3) makes the executed agreement evidence that the statutory conditions and the statutory prescribed terms have been complied with. Failure to supply a compliant executed agreement under section 19 is itself a regulatory breach that the Financial Ombudsman Service weighs heavily in any redress award.

Can I refer the PCP mis-sell complaint to the Financial Ombudsman Service (FOS) free of charge?

Yes. The Financial Ombudsman Service is a free, jurisdiction-free redress scheme for complaints about regulated financial services firms (lenders, brokers, and intermediaries authorised and regulated by the FCA). The FOS will consider complaints about mis-sold PCP and HP agreements, undisclosed commission, discretionary commission arrangements, irresponsible lending under CONC 5.5, and misleading information under the Consumer Rights Act 2015. Its awards are binding on the firm. Sending a formal complaint letter to the firm first is the prerequisite to FOS referral.

PCP Car Finance Mis-Sell Complaint Letter — CCA 1974 s.19 / s.140A + CRA 2015 s.19 / s.23 Auto-Cite

A balloon payment that turned out to be unaffordable, a Discretionary Commission Arrangement you didn't know about, a rate inflated by broker commission, or a wrongly-affordability-tested agreement — the auto-cite engine below maps your complaint category to the right pair of Consumer Credit Act 1974 / Consumer Rights Act 2015 / FSMA 2000 / FCA CONC sections on the face of the letter.

FCA discretionary-commission-arrangement ban — 28 January 2021

Under FCA Policy Statement PS20/8 the FCA banned Discretionary Commission Arrangements (DCAs) entirely from 28 January 2021. For agreements entered into before that date the FCA has opened a retrospective redress exercise, and the Financial Ombudsman Service (FOS) treats undisclosed / discretionary commission as a mis-sell that warrants full redress. If the broker or lender in your PCP agreement had a discretionary commission arrangement in place, you have a clear claim — route it to the lender first, then FOS free of charge.

PCP final payment (“balloon”) unaffordability is the dominant complaint category

By complaint volume, the dominant PCP mis-sell category relates to the final payment (the “balloon”) being unaffordable from the customer's documented income at the time of agreement. The creditor / lender has a duty to assess affordability under FCA Principle 6 (Customers' interests) and FCA CONC 5.5 (Responsible lending). If the broker or lender skipped the affordability assessment, or proceeded with one that ignored expenditure commitments, the agreement is the subject of a formal mis-sell complaint under the Consumer Duty rules and the duty to ensure a fair credit relationship under s.140A CCA 1974.

What the Consumer Credit Act 1974 and the FCA sourcebook say about PCP

A PCP (Personal Contract Purchase) agreement, where the cash price of the car is more than £100 and the borrower is an individual acting for purposes outside their trade, is a “regulated agreement” under the Consumer Credit Act 1974. The lender must run the credit-granting process in accordance with FCA Handbook CONC (Consumer Credit sourcebook) — in particular CONC 5.5 (responsible lending), CONC 5.5A (prohibition on Discretionary Commission Arrangements), and CONC 5.5B (share-cure scheme where relevant)— and must supply the executed agreement under s.19 CCA 1974. The relationship between creditor and debtor must not be unfair to the debtor (s.140A CCA 1974), and the court has wide powers to set aside or amend the agreement where it is (s.140B CCA 1974).

Consumer Credit Act 1974 s.19 — Duty to supply the executed agreement

Section 19 of the Consumer Credit Act 1974 requires the creditor (lender) to supply the debtor with a copy of the executed agreement, and any security instrument, within seven days of the making of the agreement. Section 19(3) makes the executed agreement admissible in any court proceedings as evidence that the statutory conditions and the statutory prescribed terms have been complied with. Failure to supply a compliant executed agreement under s.19 is itself a regulatory breach that the Financial Ombudsman Service weighs heavily in any redress award.

Consumer Credit Act 1974 s.140A — Unfair relationship between creditor and debtor

Section 140A of the Consumer Credit Act 1974 provides that a creditor / borrower relationship under a regulated agreement is unfair to the debtor if (and only if) the court determines that, having regard to all the circumstances — the credit-agreement and any related agreement; anything done by the creditor; the terms of the agreement; the creditor's conduct in connection with the agreement; and the total cost of the credit to the debtor — the relationship is unfair. Section 140B CCA 1974 gives the court wide powers to set aside or amend the agreement, require the creditor to do (or not do) specified things, and to order repayment of sums paid under the agreement.

Consumer Rights Act 2015 s.19 — Implied term where the agreement was induced by misleading practice

Section 19 of the Consumer Rights Act 2015 implies a reasonable care and skill term into contracts where the contract is one for the supply of services and the consumer was induced to enter into it by misleading statements (s.19(3)-(4)) or by negligent mis-statements (s.19(5)). Where the lender / broker misrepresented the cost of credit, the cost of the final payment, or the affordability of the agreement, the CRA 2015 s.19 implied term is the primary cause of action for the misrepresentation overlay. The lender as supplier of credit services is jointly liable for the broker's misrepresentation under section 50 CRA 2015.

Consumer Rights Act 2015 s.23 — Services contract subject to financial fairness assessment

Under Section 23 of the Consumer Rights Act 2015, where the consumer has provided information to the supplier of services (the lender / broker), the contract is subject to a financial fairness assessment under section 24 CRA 2015: the contract must be on terms that are fair (“fair terms” under section 62 CRA 2015; binding contractual terms under section 63; non-binding notice terms under section 64). Where the terms of the PCP agreement are themselves unfair within the meaning of sections 62-64 CRA 2015 — for example the balloon disclosed at quotation time turned out to be substantially higher on signature — the agreement is subject to financial-fairness review and the term is unenforceable.

How to use this guide

The auto-cite engine below maps your complaint category to the right pair of statutory sections — CCA 1974 s.19 + s.140A + s.140B for balloon or interest-rate unaffordability; FSMA 2000 s.20 + FCA CONC 5.5A + FCA PS20/8 for undisclosed commission / DCA; CRA 2015 s.19 / s.23 / s.62-64 for affordability / misrepresented means. Pick the option that fits. The engine will draft the statutory hook for your letter, set the modelled response window (14 days), and tell you the operative deadline date.

Pick your complaint category

Choose the option that best fits your complaint. The engine will draft the statutory hook (CCA / CRA section + title, FCA CONC reference, modelled response window) you paste into your letter.

CCA 1974 s.19 + s.140A — Balloon / final-payment unaffordability The final balloon payment on the PCP agreement is unaffordable from documented income at the time of agreement. The creditor failed to assess affordability under FCA CONC 5.5 (responsible lending); the relationship is unfair to the debtor under s.140A CCA 1974 and the court has power under s.140B to amend the agreement and reduce the balance. CCA 1974 s.19 + s.140A — Excessive interest rate / unaffordable rate The interest rate on the PCP agreement was excessive / unaffordable from documented income at the time of agreement. The creditor failed to assess affordability under FCA CONC 5.5; the relationship is unfair to the debtor under s.140A CCA 1974; FCA PRIN 6 (Customers' interests) was breached at the credit-granting stage. FSMA 2000 s.20 + FCA CONC 5.5A — Undisclosed commission / Discretionary Commission Arrangement The broker was paid commission by the lender that was not disclosed to you before agreement, or the broker and lender operated a Discretionary Commission Arrangement (DCA) that inflated the interest rate above the lender's flat-fee rate. The DCA was banned from 28 January 2021 under FCA Policy Statement PS20/8; pre-ban DCAs are subject to retrospective redress. FCA CONC 5.5A prohibits DCAs; FSMA 2000 s.20 (the FCA's general Principle 7 / Principle 11 / Duty of Care) frames the firm-side duty. CRA 2015 s.19 + s.23 — Affordability misrepresented means (the agreement was induced by misleading practice) The broker or lender misrepresented the affordability of the agreement to you (e.g. you were told at quote stage that the final payment would be lower, that extras / fees would not be added, or that the agreement was a “soft search” that would not affect your credit file). CRA 2015 s.19 implies a reasonable-care-and-skill term where the contract was induced by misleading practice; s.23 makes the services contract subject to financial-fairness review and ss.62-64 make unfair terms unenforceable.

What to include in a PCP car finance mis-sell letter

Before you send

Your full name, address, and contact details (in the header).
The lender's full trading name and complaints-team address — not the broker. The lender's complaints address is on the FCA register and on the lender's own website; a parallel copy goes to the broker.
The vehicle Make, Model, Registration mark, the date of physical handover, and the cash price paid for the car.
The PCP finance-agreement reference number, the agreement date, the deposit paid, the agreed monthly instalments, the term in months, and the final balloon payment figure.
The complaint category (final-payment unaffordability / excessive interest / undisclosed commission or DCA / misrepresented affordability) and the operative statutory section on the face of the letter (CCA 1974 s.19 + s.140A — balloon / interest; FSMA 2000 s.20 + FCA CONC 5.5A — commission / DCA; CRA 2015 s.19 + s.23 — affordability / misrep).
Your regulatory references — FCA Policy Statement PS20/8 (DCA ban 28 January 2021); FCA Handbook CONC 5.5 (responsible lending); FCA Handbook CONC 5.5A (DCA prohibition); FCA Principle 6 (Customers' interests); FCA Principle 7 (Relations with regulators); DISP 1.4 / 1.5 (complaints-handling rules).
The modelled 14-day response window and the calculated deadline date.

The escalation timeline

Send the in-page PCP Mis-Sell Complaint Letter

By Royal Mail Signed For AND email so the 14-day modelled response window is provable from the date of receipt. The lender / broker must respond substantively within 8 weeks under FCA DISP 1.4 / 1.5 complaints-handling rules.

If redress offered (FCA share-cure or FOS-style award)

If the lender acknowledges the complaint and offers redress under the FCA share-cure scheme (CONC 5.5B) or a FOS-style outcome, capture the agreement in writing. The redress typically takes the form of a refund of some of the interest paid, a reduction of the balloon balance, or, in serious cases, full rescission of the PCP agreement.

If broker was the introducer — copy the broker

Where the PCP agreement was broker-introduced (typical for hire-purchase / conditional sale / regulated motor finance), send a copy of the same letter to the broker / dealer who arranged the credit. They are jointly responsible for affordability assessment (CONC 5.5), disclosure (CONC 4.2), and avoidance of (post-28 January 2021) Discretionary Commission Arrangements.

If no substantive response within 8 weeks

Refer the complaint to the Financial Ombudsman Service (FOS) free of charge. FOS jurisdiction is unlimited on mis-sold credit claims, and its decisions are binding on the firm. The complaint letter, the Royal Mail tracking reference, the email read receipt, and any FCA PS20/8 / CONC citations are the indexed bundle for the FOS reference.

If FOS upholds (or if the firm ignores FOS)

Where the firm does not implement a FOS determination within the timescales, or where the dispute goes beyond FOS compensation limits (currently £430,000 for complaints received on or after 1 April 2025 for most regulated activities), lodge a county court claim via Money Claims Online (MCOL). For DCA / undisclosed commission claims the operative causes of action include s.140A / s.140B CCA 1974 (unfair credit relationship) and s.19 / s.50 CRA 2015 (misrepresentation and services rights).

Need professional help?

Speak to a solicitor specialising in consumer credit and motor-finance disputes

If your dispute involves a Discretionary Commission Arrangement retrospective claim, a s.140A CCA 1974 unfair credit relationship claim at county court, an FCA share-cure or FOS appellate strategy, or a multi-head claim with damages under s.50(2) CRA 2015, we can connect you with a solicitor who specialises in consumer credit litigation and motor-finance redress.

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