If you took out a car finance or Personal Contract Purchase (PCP) agreement with Close Brothers Motor Finance, you may be entitled to compensation if your agreement was mis‑sold. Many dealers historically used commission arrangements that were not clearly explained to customers, leading to higher interest rates and increased costs that the Financial Conduct Authority (FCA) now considers unfair.
This guide explains how Close Brothers agreements may have been mis‑sold, how to check if you’re eligible to claim, what compensation you could receive, and how to submit a formal complaint — including links to other helpful resources on our site.
About Close Brothers Motor Finance
Close Brothers is one of the UK’s established finance providers offering car loans, PCP, and Hire Purchase (HP) agreements through dealerships. Between 2007 and 2021 many finance agreements were arranged in ways that now fall under regulatory scrutiny for the use of discretionary or hidden commission arrangements.:contentReference[oaicite:0]{index=0}
Close Brothers has been directly affected by industry and legal developments, including a landmark Court of Appeal ruling that found failure to properly disclose commission can make an agreement unfair. The ruling in courts such as Hopcroft v Close Brothers has shaped how claims against Close Brothers and similar lenders are viewed and pursued by customers and regulators alike.:contentReference[oaicite:1]{index=1}
How Close Brothers Agreements May Have Been Mis‑Sold
A finance agreement may be mis‑sold where key details were not fully disclosed or explained at point of sale, including:
- Undisclosed Commissions: Commission paid to the dealer or broker was not clearly explained, meaning you may have paid more without knowing why.
- Discretionary Commission Arrangements (DCAs): Dealers or brokers could increase the interest rate to earn a higher commission, but customers were not told this was possible.
- Misleading or Unclear Terms: Essential information such as how interest was calculated, or that your rate was higher because of dealer influence, was not presented in a clear way.
- Inflated Interest Rates: You paid an APR (annual percentage rate) that was above typical market rates at the time, potentially costing you hundreds or thousands more over the life of the agreement.:contentReference[oaicite:2]{index=2}
The FCA banned discretionary commission arrangements in January 2021 because of how they created conflicts of interest and often led to customers paying more than they should have.:contentReference[oaicite:3]{index=3}
Industry and Regulatory Background
The FCA’s historic review of motor finance commission arrangements has resulted in significant changes to how lenders must treat complaints and consumers. Lenders were given a pause period — originally until late 2025 and, in some cases, extended until mid‑2026 — on responding to complaints about hidden commissions while regulators design a redress scheme.:contentReference[oaicite:4]{index=4}
A 2024 Court of Appeal decision held that failing to disclose commission on car finance agreements was unlawful unless fully informed consent was obtained, which has broad implications for lenders like Close Brothers. This also influenced actions by the Financial Ombudsman Service and the FCA’s approach to historic complaints.:contentReference[oaicite:5]{index=5}
Close Brothers has set aside significant funds to cover potential compensation. According to industry reporting, the lender increased its provision for motor finance redress to approximately £300 million — including adding £135 million on top of existing provisions — as part of its preparations for paying out valid claims when the FCA scheme is finalised.:contentReference[oaicite:6]{index=6}
Signs You May Have Been Mis‑Sold a Close Brothers Agreement
You may be able to make a claim against Close Brothers if:
- Your PCP or HP finance agreement was taken out in the UK between April 2007 and January 2021.
- You were not clearly informed about the commission or fees paid to the dealer or broker.
- Your interest rate was higher than it should have been due to dealer influence.
- Key details of the finance were unclear, confusing, or not adequately explained.
- You were pressured into taking a deal without being shown alternatives.:contentReference[oaicite:7]{index=7}
If these apply, you may have grounds to submit a mis‑selling claim against Close Brothers. For more on eligibility in general, see our PCP eligibility guide.
Am I Eligible for a Close Brothers PCP Claim?
To check if you qualify for a claim specifically against Close Brothers:
- Confirm that your finance agreement was with Close Brothers and dates from the period affected by commission issues.
- Review your contract for evidence of commission, inflated interest, or nondisclosure of costs.
- Compare the interest rate you were charged against average market rates at the time.
- Look for any terms that were unclear or misleading when you signed.:contentReference[oaicite:8]{index=8}
If you think your agreement meets these conditions, you could be eligible to claim compensation. You may also want to calculate an estimate using our other resources such as our PCP compensation guide.
How Much Compensation Could You Receive?
The amount you might receive depends on how much extra you paid as a result of mis‑selling. Industry estimates suggest an average compensation figure for discretionary commission claims of around £700 per agreement, although some payouts are higher and some lower.:contentReference[oaicite:9]{index=9}
Compensation typically aims to refund:
- Excess interest you paid
- Undisclosed commissions or fees
- Interest on the refund amount (to reflect time value of money) in some cases
Each claim is different, and actual compensation depends on your specific agreement. The FCA’s proposed redress scheme — expected to begin in mid‑2026 — will clarify how payments are calculated and distributed. Until then, submitting a complaint protects your position.:contentReference[oaicite:10]{index=10}
How to Submit a Close Brothers Car Finance Claim
If you believe your Close Brothers finance was mis‑sold, the general steps are:
- Gather Your Documents: Collect all paperwork related to your finance agreement, including contracts, payment statements, dealer correspondence, and evidence of commission or fees.
- Submit a Complaint to Close Brothers: Use Close Brothers’ official complaints process. They have a dedicated section for commission complaints where you can lodge your case. This ensures your complaint is logged formally.:contentReference[oaicite:11]{index=11}
- Explain Why You’re Claiming: Clearly outline why you believe the agreement was mis‑sold — for example, undisclosed commissions, inflated interest rates, or misleading terms.
- Wait for Their Response: Due to the FCA’s review, responses may be paused until regulatory deadlines pass, but lodging now protects your rights.:contentReference[oaicite:12]{index=12}
- Escalate to the Financial Ombudsman Service (FOS): If Close Brothers rejects your complaint or you don’t get a satisfactory response, you can escalate to the independent FOS. This can result in a binding compensation decision. You can find guidance on escalation in our claim deadlines page.
Tips for a Successful Close Brothers Claim
- Be precise and factual when outlining the mis‑selling issues in your complaint.
- Include all relevant documentation to support your case.
- Apply early so your complaint is recorded before regulatory changes take effect.
- Follow up with Close Brothers if they take longer than expected to respond.
- Use the Financial Ombudsman Service if necessary to strengthen your claim.
How Long a Close Brothers Claim May Take
The timeline for handling claims can vary. If Close Brothers responds, investigation and resolution can take several weeks, but due to the FCA pause on commission complaints responses, you may not receive a final answer until after the regulator completes its review and redress framework is in place — potentially in 2026.:contentReference[oaicite:13]{index=13}
If you escalate to the Financial Ombudsman Service, the process might take longer depending on complexity and documentation. For general timelines, see our claims timeline guide.
Frequently Asked Questions About Close Brothers Claims
Can I claim if my finance is fully paid or the car is sold?
Yes. Even if you’ve finished payments or sold the vehicle, you may still be eligible to claim if your agreement was mis‑sold. Eligibility depends on when the agreement was made and the presence of issues such as undisclosed commissions.:contentReference[oaicite:14]{index=14}
What if Close Brothers cannot find my agreement?
If Close Brothers can’t locate your records, provide as much identifying information as possible (agreement number, dates, vehicle registration). You can still proceed with a complaint to have them verify your details.
Do I need a solicitor to make a claim?
No. You can complain directly to the lender and escalate to the Financial Ombudsman Service at no cost. Some people choose assistance from claims specialists, but it’s not essential.
Is there a time limit for claims?
Yes. There are limitation periods and regulatory deadlines. Starting your claim sooner ensures you preserve your eligibility before any changes in policy or regulation. See our PCP claim deadline guide for details.
Conclusion
Close Brothers was among the lenders whose car finance and PCP agreements were affected by historical commission practices. If you weren’t informed about hidden commissions or your interest rate was higher due to dealer influence, you could be entitled to compensation. Review your documents, submit a formal complaint to Close Brothers, and be ready to escalate to the Financial Ombudsman Service if needed. As the FCA finalises its redress scheme in 2026, having your complaint logged now helps protect your ability to recover money you may be owed.