Two people

Discretionary Commissions

Discretionary Commissions

On Thursday (11 January 2024)  the Financial Conduct Authority (FCA) made an announcement  concerning customer complaints involving motor finance agreements, where a discretionary commission was paid to motor dealers between 6 April 2007 and 27 January 2021 (click here to read the announcement).

The FCA have introduced a 37 week pause to our complaints handling process for these customers only (i.e. regarding commissions), while the FCA undertakes an urgent review to assess whether any specific action is required.

Customers affected by the changes have up to 15 months to refer their complaint to the Financial Ombudsman rather than the usual 6 months. 

BMW Group Financial Services will take all necessary steps to support the FCA during the course of their review and to ensure that affected customers are supported and provided with every assistance to minimise any inconvenience. 

What is a discretionary commission?


Before January 2021, some lenders allowed brokers (the person that arranges the loan, for example, your car dealer) to adjust the interest rates they offered for car finance.

Typically, the amount of commission earned by a broker was determined by the interest rate that the agreement had been contracted at - the lower the interest rate, the lower the commission the broker received, and vice versa. This was known as a discretionary commission arrangement.  Since January 2021, this commission model is no longer allowed. 

Car deals have many variables and the APR agreed on any finance is only one of those. These variables could include the transaction price of the car, the size of deposit paid on the finance, the term of the agreement the agreed value of the trade-in vehicle or the provision of optional extras and special equipment, for example.

Which customers could this apply to?

If you entered into a Select or Hire Purchase agreement between 6 April 2007 and 27 January 2021 you may be included.

STEP 1: How do I find out if my agreement was subject to a discretionary commission?

Please email and include your name, date of birth, postcode, agreement number (if known) and vehicle registration number. Please await confirmation before registering a formal complaint (STEP 2). We'll come back to you as soon as possible.

STEP 2: I have received confirmation my finance agreement was subject to discretionary commission. How do I make a formal complaint?

To register a complaint, please click on the button below. If you have multiple finance agreements that were subject to discretionary commissions then please complete a form for each one.

Register a complaint

When can I expect to hear from you?

We will be able to provide further details to you once the FCA have had an opportunity to carry out their investigations and reached a conclusion.  We understand this will be 25 September 2024 at the earliest.

Where can I find further information from the Financial Conduct Authority?

Latest News

Never miss a thing

Stay in touch with all the latest news and updates from ALPHERA and the motor finance industry, delivered direct to you.