Discretionary commission arrangements

Car finance complaints: discretionary commission arrangements

On 11.01.2024, the Financial Conduct Authority (FCA) released information about car finance complaints, specifically where lenders and brokers (or dealers) had discretionary commission arrangements (DCA).

A DCA is where a finance lender offers a (vehicle) dealer a base interest rate for a customer, and the dealer can increase the amount of commission they earn by increasing how much interest the customer pays. This was banned by the regulator in January 2021.

To find out more about this publication and how it may affect consumers, visit the 'Car finance complaints' page on the FCA's website.

First Response Finance: discretionary commission arrangements

Please be aware that First Response Finance has never engaged in discretionary commission arrangements with brokers or dealers. What this means is that the dealer or broker did not have the ability to influence the interest rate you paid on your finance agreement. The interest rate payable was predetermined by First Response Finance.

Therefore, the FCA’s concerns or intervention does not apply to First Response Finance agreements.

Any complaints received by First Response Finance will continue to be investigated and resolved within the usual timescales and any aspects of a complaint that refer to DCA will not be upheld due to the complaint point being irrelevant.

First Response Finance is a responsible vehicle finance lender, and all decisions are made in the best interests of the customer; based on credit scores, status, and income at the time of application. We'll never approve an application if we believe you might struggle with repayments.

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