If you financed a vehicle through Black Horse Finance between 2007 and 2024, you may have been affected by commission arrangements that were not properly disclosed. This comprehensive guide explains how to identify potential claims and navigate the compensation process. For a broader understanding, read our complete car finance compensation guide. For a broader overview of car finance compensation, read our complete car finance claims guide.
Black Horse Finance
One of the UK's largest vehicle finance companies, part of Lloyds Banking Group. Black Horse has provided car finance to millions of UK consumers through hire purchase (HP), Personal Contract Purchase (PCP), and lease purchase agreements.
Understanding Black Horse Finance
Black Horse Finance is a major player in the UK vehicle finance market. As part of Lloyds Banking Group, they have financed millions of vehicles across the country over many years.
Why This Matters Now
The Financial Conduct Authority (FCA) has been investigating motor finance practices, including those of Black Horse, and found widespread issues with commission arrangements between 2007-2024. This has led to a compensation scheme launching in May 2026.
Black Horse offers various car finance options including:
- Hire Purchase (HP) - Traditional installment loans where you own the car after final payment
- Personal Contract Purchase (PCP) - Lower monthly payments with a balloon payment option
- Lease Purchase - Similar to PCP but structured differently
Like many lenders, Black Horse used commission arrangements with car dealers that may not have been adequately disclosed to customers, particularly Discretionary Commission Arrangements (DCAs) that were banned by the FCA in January 2021.
What is a Black Horse Finance Claim?
A Black Horse Finance claim is a formal complaint regarding potential mis-selling of your car finance agreement. These claims typically relate to:
Common Claim Types
Commission Disclosure Issues: You were not properly informed about commission arrangements between Black Horse and the dealer.
Discretionary Commission Arrangements (DCAs): The dealer could increase your interest rate to earn higher commission without your knowledge. Learn more about what DCAs are.
Irresponsible Lending: Black Horse provided finance without conducting adequate affordability checks for your circumstances.
If you experienced any of these issues, you may be eligible for compensation.
How the Car Finance Investigation Started
FCA Investigation Timeline
The FCA's investigation revealed that many car finance practices were not in consumers' best interests. Discretionary Commission Arrangements were a particular concern, as they allowed dealers to increase interest rates to earn higher commission, creating a clear conflict of interest.
Discretionary Commission Arrangements Explained
DCAs were commission structures that operated in the car finance industry between 2007 and January 2021.
DCA (Discretionary Commission Arrangement)
A commission structure that allowed car dealers and brokers to adjust your interest rate. The higher they set your rate, the more commission they earned from the lender - creating a fundamental conflict of interest.
How DCAs Worked
The DCA Process
The Core Problem
Dealers were financially incentivized to charge you higher interest rates, not to secure the best deal for you. This conflict of interest meant you likely paid more than necessary without knowing alternatives existed.
The FCA banned DCAs on 28 January 2021, but consumers with agreements from 2007-2021 may be eligible for compensation through the upcoming redress scheme.
How Car Finance Deals Have Been Mis-Sold
Several practices in the car finance industry have led to compensation claims:
Signs of Mis-Selling
- **Undisclosed Commissions**: You weren't told about commission paid to dealers or brokers
- **Inflated Interest Rates**: Your rate was increased to generate higher dealer commission
- **Lack of Transparency**: Full costs and terms weren't clearly explained
- **Inadequate Affordability Checks**: Finance was approved without proper assessment of your ability to afford it
- **Conflicts of Interest**: The dealer's financial incentive wasn't disclosed
- **Hidden Fees**: Additional charges that weren't properly explained
These practices can result in you paying significantly more than necessary and experiencing financial difficulties as a result. Learn more about how to check if your car finance was mis-sold. Read our complete guide on mis-sold car finance claims to identify if your agreement was mis-sold.
Am I Eligible for a Black Horse Finance Claim?
Several factors determine eligibility for Black Horse compensation claims.
Eligibility Requirements
- ✅ Had a car finance agreement with Black Horse between 2007-2024
- ✅ Commission arrangements were NOT properly disclosed to you
- ✅ You have (or can obtain) records of your finance agreement
- ✅ You were a UK consumer when taking out the finance
- ✅ The agreement was for a vehicle (not other purposes)
Specific Circumstances That May Qualify
Strong Claim Indicators
For DCA Claims (2007-2021):
- Your paperwork contains no mention of commission
- You weren't told dealers could adjust interest rates
- No disclosure of how commission affected your rate
- Agreement was between 6 April 2007 and 28 January 2021
- Read our PCP claims guide if you had a Personal Contract Purchase agreement
For Commission Disclosure Claims (2007-2024):
- Commission paid but not adequately disclosed
- You weren't given opportunity for informed consent
- The arrangement created an unfair relationship
For Irresponsible Lending Claims:
- Black Horse didn't properly check your income
- Your expenditure wasn't adequately assessed
- The finance was clearly unaffordable for your circumstances
- You experienced financial difficulties as a result
Don't Have Your Documents?
You can request copies from Black Horse under data protection law. Alternatively, claims management companies can retrieve these documents using soft credit checks at no upfront cost.
How Black Horse Compensation Works
Understanding how compensation is calculated helps set realistic expectations, though final methodologies await the FCA's May 2026 redress scheme.
Calculation Principles
Compensation Approaches
For DCA Claims:
The general approach calculates the difference between:
- What you actually paid at the inflated rate
- What you would have paid at the base rate (without discretionary markup)
- Plus 8% statutory interest per year from payment dates
For Commission Disclosure Claims:
Two potential methods:
1. Commission Repayment: Return of undisclosed commission plus statutory interest
2. APR Adjustment: Recalculation at fair rate, refunding the difference plus interest
Illustrative Example
Understanding Potential Compensation
Scenario: Mrs. Y's Black Horse Agreement
- Total charge for credit: £2,096.47
- Broker commission: £1,146.67
- Base rate available: 2.49%
- Rate actually charged: 5.5%
Outcome: Black Horse ordered to refund the difference between:
- Interest at 2.49% (what should have been paid)
- Interest at 5.5% (what was actually paid)
- Plus 8% statutory interest for each year since payments
*This is a simplified example. Actual compensation depends on individual circumstances and FCA methodologies.*
Final Amounts Not Yet Known
The exact compensation methodologies will be published when the FCA redress scheme launches in May 2026. Until then, precise amounts cannot be determined, but understanding these principles helps assess potential claims. For more on compensation calculations, see our car finance compensation calculator guide.
Understanding Your Consumer Rights
Your Legal Protections
As a UK consumer, you have important rights regarding loans and finance agreements:
Fair Treatment: Lenders must treat you fairly under FCA regulations
Transparency: You're entitled to clear information about costs and terms
Dispute Resolution: You can challenge incorrect charges or unfair practices
Compensation: If you suffered financial loss due to mis-selling, you can seek redress
Free Alternatives: You can always claim yourself or use the Financial Ombudsman Service at no cost
The FCA's Pause on DCA Claims
The FCA has introduced temporary complaint handling rules affecting DCA claims.
Temporary Pause Explained
The FCA noticed inconsistencies in how different lenders were handling DCA claims. To ensure fair, consistent treatment for all consumers, they introduced a pause on DCA claim responses until the redress scheme launches in May 2026.
What This Means for You:
Impact of the Pause
Why Submit Now Despite the Pause
- Secures Your Place: Claims processed in order received
- Beats the Rush: Avoids surge expected at scheme launch
- Protects Your Position: Guards against potential future deadlines
- Time to Gather Evidence: Allows preparation before processing begins
What to Do If You Had Black Horse Finance
If you had a car finance agreement with Black Horse between 2007 and 2024, here's your path forward.
The Claims Process
Required Personal Information
To submit a claim, you'll typically need:
Documentation Checklist
- Personal details (name, address, date of birth)
- Finance agreement number and dates
- Vehicle details
- Payment records and bank statements
- Correspondence with Black Horse or the dealer
- ID verification documents
Your Claiming Options
Three Routes to Claiming
Option 1: Claim Yourself (Free)
- Submit complaint directly to Black Horse
- Use Financial Ombudsman Service if needed
- No fees or costs
- Requires your time and effort
Option 2: Financial Ombudsman Service (Free)
- Independent review of complaints
- No cost to consumers
- Binding decisions on lenders
- Must usually try Black Horse first
Option 3: Claims Management Company (Optional)
- Professional handling of entire process
- Typically no win, no fee (30% + VAT, FCA capped)
- Document retrieval included
- Expert assessment of claim types
- Only pay if claim succeeds
Choose Based on Your Circumstances
There's no requirement to use a claims management company. Many consumers successfully claim themselves. Professional help may be beneficial for complex situations, multiple agreements, or if you prefer expert handling.
Why Consider Professional Help for Claims
While claiming yourself is always an option, understanding when professional assistance may be beneficial helps you make informed decisions.
Benefits of Professional Claims Handling
Document Retrieval:
- Use legal rights to obtain records from Black Horse
- Access to credit reference agencies
- Soft credit checks to identify all agreements
Expert Assessment:
- Identify multiple claim types you may not recognize
- Review for both DCA and irresponsible lending
- Assess strongest approach for your circumstances
Professional Communication:
- Experienced negotiation with lenders
- Proper presentation of evidence
- Knowledge of legal precedents and regulations
Time Savings:
- Handle all correspondence
- Manage the 8-week response period
- Escalate to Ombudsman if needed
No Upfront Cost:
- No win, no fee arrangement
- FCA-capped fees (30% + VAT maximum)
- Only pay if claim succeeds
- Cancellation rights protected
Regulatory Protection
Claims management companies must be FCA-authorized and follow strict conduct rules. Check the FCA register before engaging any company to ensure they're properly regulated.
The May 2026 Redress Scheme
Understanding what's coming helps you prepare and set realistic expectations.
What Happens When
What the Scheme Will Establish
Key Scheme Components
Standardized Methodologies: Clear calculation approaches all lenders must follow
Presumption of Harm: Where disclosure was inadequate, consumers presumed to have suffered loss
Two Remedies Proposed:
1. Commission repayment with statutory interest
2. APR adjustment remedy
Rebuttal Provisions: Lenders can prove no harm (e.g., 0% APR deals)
Escalation Rights: Clear procedures for disputes and Ombudsman referrals
Important Time Limits to Know
Act Promptly to Protect Your Rights
Standard Time Limits:
- Six Years from the agreement date, OR
- Three Years from when you became aware of the issue ("date of knowledge")
FCA Pause Considerations:
- DCA claims may be paused until May 2026
- Submit now to queue your claim
- Protects against potential future deadlines
Why Submit Early:
- Claims processed in order received
- Beats expected surge at scheme launch
- Allows time for document gathering
- Secures your position in the queue
What If Black Horse Has Gone Out of Business?
While Black Horse (as part of Lloyds Banking Group) is a major, stable institution, it's worth understanding consumer protections.
Financial Services Compensation Scheme (FSCS)
Protection Available:
- Up to £85,000 per person for firms failing after 1 April 2019
- Different limits for failures before 1 January 2010
- Covers authorized financial services activities
Black Horse Status:
- Part of major banking group (Lloyds)
- Highly unlikely to fail
- But FSCS protection applies to all regulated firms if needed
If Your Dealer Has Closed
You Can Still Claim
Even if the dealer who sold you the finance has closed, you can still make claims against Black Horse as the lender. The lender's obligations regarding disclosure and fair treatment remain regardless of dealer status.
Frequently Asked Questions
"Can I claim if I've already paid off my Black Horse finance?"
Yes. As long as your agreement was within the eligible time period (2007-2024), you can make a claim even after fully paying off the finance. Compensation can still be calculated and paid for historical issues.
"How long will my Black Horse claim take?"
Current Timeline:
- Black Horse has 8 weeks to respond to complaints
- DCA claims may be held until May 2026 redress scheme
- Irresponsible lending claims proceed normally
- Ombudsman cases typically take 3-6 months
After May 2026:
- FCA expects most claims processed within 12-18 months
- Complex cases may take longer
"What if I can't find my Black Horse paperwork?"
You have several options:
- Request copies from Black Horse (they must provide under data protection law)
- Use credit reports to identify agreements
- Make subject access requests under GDPR
- Claims management companies can retrieve documents using soft credit checks
"Will making a claim affect my credit score?"
No. Making legitimate compensation claims should not impact your credit score. Continue making any ongoing payments as required to avoid any negative effects.
"Can I claim for multiple Black Horse agreements?"
Yes. If you had multiple car finance agreements with Black Horse, you can make claims for each one. Each agreement is assessed independently on its own merits.
Taking Action on Your Black Horse Claim
If you believe you may be eligible for Black Horse compensation:
Your Next Steps
Check Your Black Horse Eligibility
Not sure if you qualify? We'll review your circumstances and let you know if you have potential grounds for a claim. Free assessment, no obligation.
Check My EligibilityImportant Disclaimers
Realistic Expectations
No Guarantees:
Making a claim does not guarantee compensation. Each case is assessed individually based on evidence and circumstances.
Your Rights:
You can always claim yourself for free or use the Financial Ombudsman Service at no cost. Using a claims management company is optional.
Fees:
Claims management companies typically charge 30% + VAT of compensation (FCA-capped), but only if your claim succeeds.
Professional Advice:
This guide provides general information. For specific advice on your circumstances, consider consulting with regulated advisors or the Financial Ombudsman Service.
Related Resources
For more information about car finance claims, explore our other guides:
- Car Finance Compensation Guide - Complete overview of all claim types
- Understanding DCAs - Deep dive into Discretionary Commission Arrangements
- FCA Redress Scheme 2026 - What to expect from the upcoming scheme
- PCP Claims Guide - Specific information about Personal Contract Purchase claims
- Mis-Sold Car Finance - How to identify if your finance was mis-sold
Conclusion
Black Horse Finance compensation represents a significant opportunity for millions of UK consumers who may have been affected by undisclosed commission arrangements between 2007 and 2024.
Key Takeaways
Widespread Issue: Up to 14 million consumers potentially affected across all motor finance lenders, including Black Horse.
FCA Action: Comprehensive redress scheme launching May 2026 with standardized methodologies.
Multiple Claim Types: DCAs, commission disclosure, and irresponsible lending claims all possible.
Submit Promptly: Claims processed in order received; early submission secures queue position.
You Have Options: Claim yourself (free), use Ombudsman (free), or choose professional help (optional, fee-based).
No Guarantees: Compensation depends on individual circumstances and evidence.
Understanding your rights and the claims process empowers you to make informed decisions about whether pursuing a Black Horse compensation claim is appropriate for your circumstances.
If you had car finance with Black Horse between 2007 and 2024 and believe commission was not adequately disclosed or affordability checks were inadequate, consider reviewing your eligibility and taking action to protect your rights.
