Discretionary Commission Arrangement (DCA)
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Definition: A now-banned car-finance practice where the dealer could set your interest rate and earned more commission the higher the rate — usually without telling you.
Until the FCA banned them in January 2021, discretionary commission arrangements let car dealers (acting as credit brokers) increase a borrower's interest rate to boost their own commission. Because this was rarely disclosed, agreements with a DCA before 28 January 2021 are the focus of potential compensation.
Following a 2025 Supreme Court judgment on commission disclosure, the FCA confirmed an industry-wide redress scheme. Affected drivers can complain to their lender for free rather than using a claims management company.
Primary source: fca.org.uk/consumers/car-finance-complaints