Updated: 20 October 2025

Originally Published: 03 March 2025

If you took out a car finance deal in recent years, you could be in line for a payout. Thousands of UK motorists have since found that they were unknowingly signed up to unfair or misleading finance packages. Hidden commissions, increased interest rates or contracts full of jargon and misleading small print were common occurrences. A lender to come under increasing pressure in recent months is Close Brothers Finance. The company is at the centre of growing mis-sold car finance complaints.

Recent regulatory and legal developments have made it easier for affected drivers to seek refunds. August 2025 saw the Supreme Court decide on undisclosed commissions that can constitute an "unfair relationship" within the meaning of consumer credit legislation [1]. The FCA opened a consultation to propose the introduction of a national compensation scheme for the mis-selling of historic car finance [2].

This guide explains how to identify whether you were mis-sold, gather evidence, and take the right steps to file a Close Brothers claim or escalate it if your lender fails to respond fairly.

Step 1: Check If You're Eligible

Before you make a claim, make sure that your car finance agreement was mis-sold to you. Mis-selling is where information is obscured, misleading, or presented unfairly. There are several red flags which can tell you if you may be eligible for compensation:

1. Undisclosed Commissions

If your dealer received a commission for arranging your finance but you were never told, this could make your contract unfair. In many cases, dealers increased the interest rate on a loan to boost their own earnings—a practice known as a discretionary commission arrangement. These arrangements were banned by the FCA in 2021 [3] after it found they created conflicts of interest between dealers and consumers.

2. Unfair or Confusing Terms

You may also have been mis-sold if:

• You were pressured into refinancing without being shown other options.
• Your Personal Contract Purchase (PCP) agreement had unrealistic mileage limits or steep penalties.
• The final balloon payment was misrepresented as affordable when it was not.

3. Lack of Transparency

If you were not given clear information about interest rates, hidden fees, or early settlement charges, your agreement may have been unfair. Some customers paid far more than expected because dealers failed to disclose crucial details at the point of sale.

The draft FCA scheme applies to all finance deals made between 6 April 2007 and 1 November 2024 inclusive, including HP and PCP claims. If your deal is within these dates then you could be eligible to receive compensation from when the scheme opens in 2026.

In the end, you can also simply use a Close Brothers refund checker for a quick check.

Step 2: Gather Strong Evidence

Once you suspect you've been mis-sold, start collecting documents that support your case. Having clear, organised evidence will strengthen your position when submitting your claim.

Key Documents to Collect

• Copy of Your Loan Agreement – This includes your loan number, interest rate, fees, total cost, and repayment terms.
• Dealer or Lender Correspondence – Emails, letters, or verbal statements that show what you were told about the finance deal.
• Bank Statements – Evidence of payments made and unexpected charges.
• Evidence of Financial Impact – Interest overcharged, over mileage penalties, early repayment charges.

If you have lost your paperwork you can request copies from your lender or dealer. Retain electronic and paper copies of everything. This will make it easy to prove your claim.

Step 3: File a Complaint with Close Brothers Finance

After your paperwork is complete, make a formal complaint to Close Brothers Finance. Financial firms are required to handle all consumer complaints fairly and respond within specific timeframes.

How to Submit

You can raise your complaint by email, post, or phone, though written communication is preferable for record-keeping. Tell them: 

• your name and contact details  
• your agreement number and car details
• why you believe your agreement was mis-sold (for example high commission rates or unfair terms)
• copies of evidence (contracts, bank statements etc).

For example:

"I wish to complain about my car finance agreement (Loan No. XXXXXXX) with Close Brothers Finance. I was not informed that my dealer received a commission, which affected the interest rate I was charged. I request a review of my agreement and a refund of any overpaid interest or charges."

Keep copies of your complaint and any responses. Send any letters by recorded delivery so you have proof they have been received.

Step 4: Wait for a Response or Escalate to the Financial Ombudsman Service

Close Brothers Finance has up to eight weeks to respond. In the meantime they could: 

• Accept liability and make a compensation offer 
• Ask for further information 
• Reject your claim 

In early 2024 however, the FCA opened a review of historic car finance contracts with Close Brothers and other lenders. The FCA said it would temporarily suspend dealing with complaints [4] to "enable us to agree a fair and consistent approach to resolving consumer cases."

If you disagree with the outcome, you can refer your case to the Financial Ombudsman Service (FOS). The Ombudsman offers an independent and free of charge review service for financial complaints.

Steps to take 

• Go to the FOS website and fill in the online complaint form.
• Upload your evidence, including the original complaint and any lender responses.
• Wait for the investigation to conclude: this could take a number of months depending on the complexity of the case.

If the Ombudsman decides in your favour, you may receive a refund of overpaid interest and unfair charges or other losses you may have incurred as a result of mis-selling.

Step 5: Seek Professional Support if Needed

You might want to think about using a finance claims expert to help you if you don't think you can fill in the claim form or you don't want to negotiate with the lender yourself. A claims expert should know how a lender operates and make sure your case is presented as effectively as possible.

Types of help available 

• Lawyer: A consumer credit or mis-sold finance solicitor can help you with the process and even negotiate on your behalf. Many solicitors work on a "no win, no fee" basis.
• Claims management company: Claims management companies are FCA-regulated and will handle your claim for a fee or a portion of your settlement. Be sure you understand what the costs will be before you proceed, and ensure the company you are dealing with is bona fide.

The FCA estimates that the average discretionary commission payout could be around £700 per agreement [5], but some claims could be worth significantly more depending on the size of the loan and the interest rate.

Step 6: Understand the Current FCA Timeline

The FCA has set out plans to compensate those who were mis-sold car finance, including Close Brothers Finance refunds, are currently part of the consultation. Responses are due by 18 November 2025. 

The regulator will set its final rules in early 2026 and pay-outs will start later that year. The plan is designed to offer a single, fair redress scheme for millions of drivers without lengthy individual court battles.

If implemented, the scheme could deliver refunds averaging £700 per customer, totalling up to £8–9 billion across the industry. This would make it one of the largest consumer compensation efforts in UK history.

FAQs

Can I claim against Close Brothers Finance?

If you think you were mis-sold a PCP car finance agreement or hire purchase agreement, you may well be able to make a claim against Close Brothers Finance, it all depends on if you have been affected by hidden or unfair commission.

How much can I claim from Close Brothers Finance?

The FCA has estimated that a typical payout would be around £700 per agreement. However, some Close Brothers Finance claims could be worth several thousand pounds.

Can I claim on Close Brothers Finance if my PCP has finished?

Yes, you can still make a claim against Close Brothers Finance, even if your PCP agreement has already finished. It is the initial mis-selling of the finance which is relevant, not when the agreement term ended.

What if Close Brothers Finance turned down my claim?

You can refer your complaint to the Financial Ombudsman Service if you are unhappy with the way Close Brothers Finance has dealt with your claim, or if they turn it down completely. The Ombudsman will examine your case and make a decision.

Do I need to use a professional to make a claim against Close Brothers Finance?

You can make a claim on your own, directly with Close Brothers or the Financial Ombudsman Service, but many people use a regulated claims management company to help them.

Conclusion

Did you have a car finance agreement between 2007 and 2024? You could be due compensation for unfair treatment. Were undisclosed commissions charged to you or were you misled over contract terms? You can see your contract and recover your money.

It involves evidence gathering, writing a complaint letter and if necessary referral to the Financial Ombudsman. Get professional help. New FCA rules will launch in 2026. Prepare your documents and start building your case before the national redress scheme begins.

__________

References:

1. In August 2025, the Supreme Court’s ruling on undisclosed commissions clarified that such practices can amount to an “unfair relationship” under consumer credit law - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
2. the Financial Conduct Authority (FCA) opened a consultation to propose a national compensation scheme to address the issue of historic car finance mis-selling - https://www.fca.org.uk/news/statements/fca-consults-motor-finance-compensation-scheme
3. DCAs were banned by the FCA in 2021 - https://www.fca.org.uk/publication/consultation/cp24-15.pdf 
4. The FCA said it would temporarily suspend dealing with complaints - https://www.fca.org.uk/news/statements/firms-given-until-december-2025-respond-motor-finance-commission-complaints
5. the average payout for discretionary commission cases could be around £700 per agreement - https://www.fca.org.uk/news/press-releases/14m-unfair-motor-loans-compensation-proposed-scheme