Clydesdale Finance and the Car Loan Commissions Scandal: Can You Claim Compensation?

Updated: 01 September 2025

Originally Published: 24 March 2025

Clydesdale Partner Finance, part of Barclays Partner Finance, has been a major name in the UK car finance market for years. Thousands of drivers have taken out Clydesdale Bank car finance through hire purchase (HP) or personal contract purchase (PCP) plans.

But recent investigations have exposed a major problem. Both Barclays Clydesdale Finance and many of its brokers used discretionary commission arrangements that allowed dealers to increase customer interest rates in order to boost their own earnings. This practice is now at the heart of the car finance scandal and has left many borrowers questioning whether they were mis-sold PCP car finance.

The Financial Conduct Authority (FCA) has found that Clydesdale Finance Barclays often failed to disclose these commissions, meaning customers of Barclays Partner Finance Clydesdale and those with Clydesdale Bank PCP agreements may now have the right to claim compensation.

How Is Clydesdale Finance Connected to Barclays?

Clydesdale Finance Barclays is a subsidiary of Barclays Partner Finance. It was one of the lenders with the highest discretionary commission sales. Under that model, car dealers could charge a higher interest rate on a Clydesdale Bank car loan and collect more commission, often without the customer knowing it.

For customers, this meant:

• Many Clydesdale car finance PCP borrowers paid more interest than they needed to
• Dealers put their own profits first rather than finding the best deal
• Clydesdale Bank car finance customers were often left in the dark about cheaper alternatives

The FCA concluded that Barclays Clydesdale Finance did not handle commission transparency properly. That finding now gives thousands of drivers with Clydesdale Bank car finance agreements clear grounds to claim redress.

What Are Discretionary Commissions and Why Do They Matter?

A discretionary commission meant the dealer could set your interest rate. The higher they pushed it, the more they earned. For borrowers, this often meant paying thousands of pounds more on a Clydesdale Bank PCP or a Clydesdale Bank car loan.

Customers affected include:

• Clydesdale Finance PCP borrowers who unknowingly paid inflated rates
• People with Clydesdale Partner Finance loans who never had commissions explained
• Barclays Clydesdale Finance customers who assumed they were being offered a fair deal

These practices are now widely considered to be mis-selling PCP car finance. That gives borrowers the chance to challenge their agreements and claim money back.

What Has Changed in 2025?

• Supreme Court ruling (August 2025) [1]. The Court ruled that not all commissions render a loan illegal. However, if Clydesdale Finance or its brokers concealed their discretionary commissions or inflated interest rates in an unfair manner, this may still be considered an "unfair relationship" under consumer credit law. Many Clydesdale finance claims have been left open due to this.
• FCA consultation on redress [2]. The FCA has announced it will publish a consultation in October 2025 on how an industry-wide redress scheme should work. The consultation is expected to last for around six weeks, with final rules likely to follow in early 2026. If adopted, the scheme will probably cover finance agreements made between 2007 and 2021, including thousands of Clydesdale car finance PCP claims.
• Pause on complaints. For now, the FCA has extended its pause on commission-related complaints until 4 December 2025 [3]. Customers can still submit a Clydesdale finance claim today, but most complaints will not be dealt with until after the consultation is finished and the scheme rules are confirmed.

Who May Make a Claim Against Clydesdale Finance?

You may have a valid Clydesdale Partner Finance claim if:

You took out a Clydesdale car finance PCP or another loan through Barclays Partner Finance Clydesdale.

• The commission your dealer or broker received was not disclosed to you.
• Your interest rate was above what you paid because of commission.
• You were pushed into signing or you were denied alternative finance.
• You saw extra charges or surprise fees on your Clydesdale Bank car loan paperwork.

What Compensation Could You Expect?

Refunds are usually calculated on:

• Overpayments of interest due to discretionary commissions.
• Your Clydesdale car finance agreement may contain hidden commission fees.
• Extra charges / penalties for mis-selling like admin fees / early settlement charges.
• Financial distress from a mis-sold PCP car finance agreement, like a damaged credit score or stress.

Average Compensation Figures

Discretionary commission cases typically pay around £950 per agreement [4], the FCA suggested. The actual figure depends on your individual financial deal. Others get much less, while others may receive several thousand pounds:

• £500–£2,000 – common for shorter agreements or lower-value loans.
• £2,000–£5,000 – typical for many Clydesdale Bank PCP claims lasting several years.
• £5,000 or more – often linked to long-term Clydesdale Bank car finance agreements or higher-value vehicles.
• Additional awards – in some cases, extra compensation may be granted if the mis-sold PCP car finance caused serious financial strain or harmed your credit record.

How to Claim Against Clydesdale Finance Barclays

• Gather documentation - Gather all documentation including copies of your finance agreement, loan statements, and correspondence regarding your car finance.
• Assess Your Case – Evaluate your car finance agreement by searching for hidden commissions while checking for excessive interest rates and misleading terms. 
• Call or email Clydesdale Finance - Make a formal complaint that your finance agreement was mis-sold.
• Escalate to the Financial Ombudsman Service (FOS) if Necessary – If your claim remains unresolved or is rejected, submit it to the Financial Ombudsman Service (FOS) for further examination. 
• Seek Legal or Professional Assistance – Consult a legal expert or claims management company to enhance your case if you find the claims process confusing. 

Case Study: A Clydesdale Bank PCP Complaint

In 2018, Ms Lewis bought a used Audi on a Clydesdale Bank PCP agreement, financed by Clydesdale Financial Services (trading as Barclays Partner Finance). She was never told that her dealer was increasing her interest rate through a discretionary commission [5].

In 2021, she complained to the Financial Ombudsman Service. By January 2024, the Ombudsman had ruled that Clydesdale Finance Barclays must refund her overpaid interest and charges. In December 2024, the High Court upheld this decision, creating a precedent that strengthens all Clydesdale Bank car finance claims.

Final Word: Claiming Clydesdale Car Finance Compensation

You may be eligible for a refund if you had a Clydesdale car finance PCP or other Barclays Partner Finance Clydesdale agreement. FCA confirmed that unfair discretionary commission arrangements existed and that average compensation will be around £950 [6].

Whether your case involves a Clydesdale Bank car loan, Clydesdale Partner Finance hire purchase, or a Clydesdale car finance PCP deal, you could be owed money back. Submitting your complaint now could help you recover hidden costs and inflated interest charges.

Frequently Asked Questions

Can I make a claim against Clydesdale Partner Finance?

Yes. If you were mis-sold PCP car finance or hire purchase through Clydesdale Partner Finance, you may be entitled to a refund.

What is the average payout for Barclays Clydesdale Finance claims?

The FCA has suggested that the average payout is around £950 per agreement, but many Clydesdale Finance claims are worth several thousand pounds, depending on the loan and circumstances.

Can I still claim if my Clydesdale Bank PCP has already ended?

Yes. You don’t need to have an active agreement to make a Clydesdale car finance claim. Even if your PCP has finished, or you’ve already sold or returned the car, you may still be entitled to compensation if the finance was mis-sold.

What happens if Clydesdale Finance rejects my complaint?

If your Clydesdale Finance Barclays complaint is refused, that doesn’t have to be the end of the road. You can take the case to the Financial Ombudsman Service, which offers an independent review and has the power to order compensation if it finds in your favour.

Do I need professional help with a Clydesdale Bank car loan claim?

It’s possible to handle a claim on your own, but many people prefer to use a regulated PCP claims company. They take care of the paperwork, gather the evidence and keep on top of deadlines for you, which can make the process smoother and may improve your chances of success.

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1. Supreme Court ruling (August 2025) - https://supremecourt.uk/uploads/uksc_2024_0157_0158_0159_judgment_2bb00f4f49.pdf
2. FCA consultation on redress - https://www.fca.org.uk/news/press-releases/fca-consult-motor-finance-compensation-scheme
3. FCA has extended its pause on commission-related complaints until 4 December 2025 - https://www.fca.org.uk/news/statements/firms-given-until-december-2025-respond-motor-finance-commission-complaints
4. Discretionary commission cases typically pay around £950 per agreement - https://www.theguardian.com/business/2025/aug/04/who-will-get-car-loan-payout-how-much-regulator
5. discretionary commission - https://www.judiciary.uk/wp-content/uploads/2024/12/Clydesdale-v-Financial-Ombudsman-Service-and-others.pdf
6. unfair discretionary commission arrangements existed and that average compensation will be around £950 - https://www.thesun.co.uk/money/36207624/get-pound950-car-finance-compensation/