Undisclosed Commissions

Introducing undisclosed commissions

Undisclosed commissions are a phenomenon that has long been present in various types of commercial, financial, and insurance agreements. Yet, it is only in recent years that awareness has grown about the potential impact these secret fees can have on everyday consumers. Individuals who are involved in financial transactions—ranging from loan agreements to insurance arrangements—may never realise that part of the fee they are paying goes towards a commission to a third party. This commission is often not clearly disclosed, which can undermine trust and fairness in the transaction.

With increased regulatory scrutiny and consumer protection frameworks now applicable in the UK, there is a growing impetus for consumers to understand what undisclosed commissions are, why they matter, and how to spot them. In this guide, we explore the legal and practical aspects of undisclosed commissions, common scenarios where they arise, and the steps you can take if you believe you have been affected.

It is important to note that undisclosed commissions are not merely a technical legal matter—unfair fees can create an environment in which unsuspecting consumers pay more for financial products or services than they should, sometimes without ever realising it. This might reduce confidence in financial institutions and can also lead to unexpected debt burdens when agreements are not transparent.

Below, we delve into the various elements of undisclosed commissions, highlighting legal frameworks, consumer rights, and possible remedies if you suspect wrongdoing. Along the way, you will find examples, illustrative references, and insights from reputable UK authorities. This guide aims to demystify an area that can often seem opaque and confusing, even for those who are otherwise financially savvy.

Research from consumer protection bodies indicates that a lack of transparency around commissions can be linked to higher costs and, in some instances, may even breach regulations designed to safeguard consumers. For instance:

These figures underscore the relevance of understanding undisclosed commissions and illustrate that they are not an isolated concern. Though this figure may appear small in percentage terms, in real-world numbers it translates into significant financial and emotional consequences for UK consumers.

This guide is written to provide you with a grounding in the subject, offering a breakdown of core concepts, consumer strategies, and practical advice. Whether you already suspect that undisclosed commissions may have played a role in one of your own transactions, or you want to equip yourself with knowledge for future decisions, this resource aims to present unbiased, expert-backed insights.

As you read, keep in mind that while the regulatory landscape in the UK offers a robust framework for consumer protection, successful outcomes often hinge on understanding your rights and gathering the right evidence. We begin by defining precisely what these undisclosed commissions are, exploring the scenarios in which they are most likely to occur and examining the legal provisions that address them.

Defining undisclosed commissions

Undisclosed commissions refer to payments made to an intermediary, agent, or broker without the full awareness or explicit informed consent of the consumer or client who ultimately bears the cost. In many cases, a commission is not illegal per se—commissions can be a legitimate part of a business model for brokers, introducers, or agents acting as intermediaries. The core issue arises when these commissions remain hidden or are insufficiently explained in the contractual documentation, thereby preventing the consumer from making an informed decision.

This concept first gained widespread public attention through high-profile cases in the financial services and insurance sectors. For instance, some loan agreements and insurance policies have been arranged through a broker who is paid a percentage of the total cost as a commission. The borrower or policyholder might be under the impression that the broker’s service is free or low-cost, only to find out later that the cost of the undisclosed commission has been absorbed into their monthly or annual payments.

Key characteristics of undisclosed commissions often include:

• Lack of transparency: The consumer is not clearly informed about the commission’s existence or amount.

• Conflict of interest: The intermediary might be incentivised to recommend a certain product or service based on the commission rather than its suitability for the consumer.

• Absence of informed consent: The client has not explicitly agreed to the commission, nor have they been provided with adequate details to consent meaningfully.

• Potential breach of duty: In certain contexts, an agent or broker may owe a fiduciary duty to a consumer, which can be breached if the commission remains undisclosed.

It is important to recognise that even a small commission can add up to substantial costs over the term of a long financial arrangement, such as a mortgage or a loan. Because the consumer is typically unaware of this added layer of expense, they cannot accurately compare the product’s true total cost with other available options. This lack of comparability can distort market competition, ultimately harming not only individual consumers but also the general economic landscape.

From a legal standpoint, undisclosed commissions can give rise to civil claims under breach of contract, misrepresentation, or fiduciary duty. In some cases, regulatory investigations may also follow if allegations suggest a wider pattern of malpractice. The seriousness of the matter is highlighted by statements from consumer watchdogs and regulatory agencies that emphasise the importance of transparency in financial services.

Below is a short table illustrating some examples of how undisclosed commissions might arise in different contexts:

A deeper understanding of the legal framework supporting these requirements is crucial, as it informs both consumers and providers about their rights and responsibilities. When a commission remains hidden, it can severely undermine the principle of informed choice, leaving the consumer vulnerable. As we explore in upcoming sections, the UK has established laws and guidelines to ensure that commissions are disclosed or, at the very least, do not lead to unfair consumer detriment.

Key legislation and legal requirements in the UK

The legal framework governing undisclosed commissions in the UK is derived from multiple sources, including statutory provisions, regulatory guidelines issued by the Financial Conduct Authority, and precedents set by court rulings. Taken together, these regulations are aimed at safeguarding consumer interests by ensuring transparency and fairness in financial and commercial transactions. Understanding these laws is vital for individuals who wish to lodge a claim or defend their rights.

The role of the Consumer Rights Act 2015

One of the foundational pieces of legislation is the Consumer Rights Act 2015. While not exclusively focused on undisclosed commissions, it enshrines critical principles such as fairness in consumer contracts and the prevention of unfair terms. Under the Act, any terms that could be considered ‘unfair’ may be deemed unenforceable, particularly if the consumer was not adequately informed.

Financial Conduct Authority (FCA) regulations

The FCA’s guidelines are especially relevant to financial services and insurance sectors, where hidden commissions frequently occur. The FCA upholds principles that require firms to treat customers fairly, manage conflicts of interest, and ensure that communications are clear, fair, and not misleading. Firms that violate these principles may face enforcement actions, including fines and the imposition of redress schemes for affected consumers.

The significance of case law

Case law also plays a significant part in shaping the remedies available to consumers. A noteworthy example is the judicial interpretation of secret commissions under the law of agency, where an agent owes a duty of loyalty to the principal. If a court decides that an undisclosed commission either constitutes a bribe or material misrepresentation, it can lead to contract rescission or damages awarded to the consumer.

The Consumer Credit Act 1974 and subsequent amendments

For credit-based transactions such as loans and credit cards, the Consumer Credit Act 1974 (and its subsequent amendments, including the Consumer Credit (EU Directive) Regulations 2010) can come into play. These provisions require lenders and brokers to be transparent about the total cost of credit, including any fees or commissions.

Consistency with broader consumer protection goals

All these laws and regulatory guidelines converge on a single premise: the consumer’s right to know what they are paying for. The UK’s consumer protection ethos is designed to make it as straightforward as possible for people to seek redress, either independently through civil claims or by turning to regulatory bodies.

Below is a table summarising key provisions in some relevant legislation and regulations:

Examining common undisclosed commission scenarios

Undisclosed commissions can manifest in all kinds of agreements, from relatively small-scale consumer transactions to large commercial deals. The diversity of scenarios means that the scale and complexity of undisclosed commissions can vary widely. In each instance, however, the key feature remains that the commission is hidden or inadequately disclosed to the party ultimately bearing its cost.

Mortgages and loan arrangements

Perhaps the most well-known sector for undisclosed commissions is the mortgage and personal loan market. Brokers or financial advisors might receive a commission from the lender for recommending a particular product, which can influence the impartiality of the advice provided. This commission could be woven into the interest rate or fees without the client’s full understanding. In the long run, a borrower might end up paying more, believing they have secured an optimal deal.

Insurance policies

Insurance products, including life insurance, critical illness cover, and payment protection policies, can also involve undisclosed commissions. An agent or broker might suggest a particular policy because it pays them a higher commission, rather than because it genuinely meets the client’s needs. Over a long-term policy, the cumulative effect of higher premiums can be significant.

Vehicle financing and leasing

Car dealership financing offers another example, where sales staff receive a commission for each finance agreement sold. Although some dealers clearly notify customers about the existence of these charges, in many cases, the details are vague or buried within extensive paperwork.

Real estate transactions

While less common, transactions involving estate agents can sometimes include an undisclosed commission. This may occur if an agent receives a hidden payment from a third party, such as a conveyancer, mortgage broker, or solicitor, for referring a client.

Business-to-business agreements

It is not only individual consumers who are at risk; businesses can also be affected. In business-to-business agreements, an undisclosed commission might be included in procurement contracts, supplier agreements, or distribution deals.

Below is a short table showcasing common scenarios and the typical risks they pose:

The consumer impact of undisclosed commissions

When undisclosed commissions are embedded within financial products or services, consumers often face tangible and intangible repercussions. On the tangible side, these secret commissions can inflate the overall cost of a product, leading to higher monthly payments or increased debts that the individual might struggle to repay. On the intangible side, there is the erosion of trust—not just in the specific product or service, but potentially in the broader financial system.

Financial strain

From a purely financial perspective, undisclosed commissions can be the difference between an affordable loan or insurance policy and one that puts an individual under unnecessary pressure. For example, adding even a small hidden fee to monthly repayments can accumulate into a significant sum over the lifespan of a mortgage or multi-year insurance policy. According to Citizens Advice (2021), consumers affected by hidden fees and commissions report higher incidents of payment delinquency and an increased likelihood of taking on secondary loans to service existing debts.

Emotional and psychological effects

Financial stress has a well-documented impact on mental health and wellbeing. Discovering that you have been paying more than necessary for a product or service can take a toll on confidence and create anxiety about personal finances.

Distortion of consumer choice

A fundamental principle of consumer protection is the right to make an informed decision. Undisclosed commissions undermine this principle by skewing the product selection process in favour of higher-commission offerings.

Social and market-level implications

On a larger scale, these undisclosed commissions can distort market competitiveness. A financial institution willing to pay bigger commissions may draw more broker recommendations, irrespective of the actual quality or suitability of the product.

Protection through consumer awareness

Although regulations exist to curb these practices, awareness is the first line of defence. By arming yourself with knowledge about undisclosed commissions and staying vigilant—particularly when entering major financial agreements—you can better protect your own interests.

Identifying the warning signs

Undisclosed commissions typically leave subtle clues that can be spotted if you know what to look for. While there is no single, foolproof method of detection, a combination of heightened awareness, careful document review, and targeted questioning often yields enough evidence to confirm whether a commission existed—and went unmentioned.

Common indicators include:

• Inconsistent or vague fee breakdowns in your financial documents where unexplained costs or ambiguous charges appear.

• High product prices compared to market norms, with no clear justification like personal credit risk.

• Pressure tactics or rushed transactions that discourage careful review of contract terms.

• Conflicting advice or sudden changes in product recommendations without a clear rationale.

• Evasive responses from brokers or agents when asked for a full breakdown of fees.

Recognising these signs is just the first step. Often, you will need written proof or consistent supporting evidence to challenge a commission arrangement effectively.

Taking action if you suspect wrongdoing

Once you suspect that an undisclosed commission might be part of a financial agreement, it is crucial to act systematically. Whether you are dealing with a potentially inflated loan, an overcharged insurance policy, or a hidden fee in a business contract, the steps you take to gather evidence and seek redress can significantly influence the outcome.

1. Revisit and review your documents
   Collect all contracts, statements, and correspondence to identify any unexplained fees or references to third-party remunerations.

2. Seek clarification from the intermediary
   Ask direct questions about fee structures, commissions, or specific line items that appear on statements.

3. Consult reputable sources and guidelines
   Organisations like the Financial Conduct Authority (FCA) provide guidance on potential mis-selling or non-disclosure.

4. Formulate a complaint and follow internal procedures
   Most regulated firms must have a formal complaints process. Submit your concerns in writing, with evidence.

5. Escalate to the Financial Ombudsman Service (FOS)
   If you are not satisfied with the firm’s response, the FOS can review the dispute impartially.

6. Evaluate your legal options
   For substantial claims, you may need to consider court action, especially if ombudsman involvement does not resolve the dispute.

7. Stay vigilant
   Continue monitoring your statements and seeking clarity in future transactions to avoid repeat scenarios.

Bringing a claim for undisclosed commissions

If you decide to pursue a formal claim, your success can hinge on how well you can demonstrate both the existence of the commission and the fact that it was concealed. Claims may be based on misrepresentation, breach of fiduciary duty, breach of contract, or unfair relationship under the Consumer Credit Act.

Pre-action protocols and negotiation

Before going to court, you generally need to follow established pre-action protocols, which involve explaining your claim in writing and giving the other party time to respond or settle. This phase can sometimes result in an amicable settlement, saving time and costs.

Legal proceedings

Should your dispute proceed to court, you will need to file a claim form and particulars, outlining your case in detail. The defendant then has an opportunity to respond. Evidence collection, witness statements, and possibly expert testimonies may follow, leading up to a trial if the matter remains unresolved.

Alternate dispute resolution (ADR)

Mediation, arbitration, or other forms of ADR can offer a less adversarial route, potentially leading to a swifter resolution. These methods can be employed before or during formal litigation, depending on both parties’ willingness to cooperate.

Potential remedies

While some claimants aim for direct financial compensation, others seek contract rescission or revised terms to remove the hidden commission aspect. Judges or ombudsmen can also order the disclosure of additional information, which may be critical if you suspect other undisclosed fees.

Collecting and presenting evidence

Evidence forms the backbone of any successful claim related to undisclosed commissions. Given the often secretive nature of these financial arrangements, collecting sufficient proof can sometimes be a challenge—but it is absolutely necessary. You may wish to focus on:

• Documenting the commission through emails, account statements, and internal notes obtained via Subject Access Requests.

• Proving non-disclosure by highlighting unclear contract clauses, misleading disclaimers, or evasive answers given when you sought clarification.

• Demonstrating financial loss using comparative quotes, calculations of overpayments, and a clear link between the hidden fee and your higher costs.

Expert testimony from forensic accountants or industry specialists might also bolster your case, clarifying how typical commissions are usually handled and illustrating deviations in your specific agreement.

What success could look like

A positive resolution to an undisclosed commissions claim can manifest in different ways:

• Financial compensation: Reflecting the overcharged amount, plus potential interest.

• Reduction in payments or revised terms: Particularly relevant where loans or credit agreements are ongoing.

• Rescission of contract: In cases where the hidden commission undermines the very foundation of the agreement.

• Broader legal impact: Some decisions set precedents, guiding future regulatory or judicial handling of undisclosed fees.

Beyond the financial dimension, achieving redress can restore a sense of fairness and trust.

Deadlines and extra legal factors

UK law imposes statutory limitation periods, typically six years for most contractual or tort-based claims per the Limitation Act 1980. However, discovering a hidden commission years after you signed a contract can complicate matters. Courts sometimes allow for delayed discoverability, but this is not automatic.

The cost of pursuing a claim is another important consideration. Although ombudsman services are generally free, court proceedings involve fees and possibly solicitor or barrister costs. Some cases are suitable for conditional fee arrangements like ‘no win, no fee,’ but be sure to assess the overall viability of your claim carefully.

Navigating professional assistance

Pursuing a claim for undisclosed commissions can be time-consuming and legally complex, prompting many individuals to seek professional support. Depending on your case’s nature and scope, this assistance might come from claims management companies (CMCs), solicitors, or other legal advisers.

Below is a table outlining key differences between claims management companies and legal professionals:

Whether you approach a CMC or a solicitor, scrutinise their credentials and fee structures. In some scenarios, a solicitor’s expertise is invaluable—particularly if your claim is high-value or legally intricate. CMCs might suffice for more straightforward cases.

Avoiding common pitfalls

Undisclosed commission claims can be intricate, and even a strong case can falter if certain mistakes are made along the way. To maximise your likelihood of success, consider the most common pitfalls and how best to avoid them.

Underestimating evidence needs

Failing to produce consistent, adequate documentation seriously weakens your position. Keep contracts, emails, and statements well-organised and accessible.

Overlooking deadlines

The statutory six-year limitation period can pass quickly. Even if you discover the hidden fee later, delayed discoverability must be argued successfully.

Not following internal complaints procedures

Skipping the firm’s complaints process can invalidate or delay your case, especially if you hope to involve the Financial Ombudsman Service.

Settling prematurely

Sometimes, the first offer does not reflect the full extent of your losses. Seek independent advice to assess any proposed settlement.

Inadequate diligence

Pick reputable service providers if you enlist professional help. Check regulatory status and past reviews to ensure competence and fairness.

Summary of key insights

Undisclosed commissions represent a hidden cost that can significantly inflate financial commitments, from mortgages to insurance policies. As we have seen, the complexities of this issue stretch beyond mere technicalities, encompassing emotional well-being, market fairness, and fundamental consumer rights.

Understanding the core problem

At the heart of every undisclosed commission is a lack of transparency. Consumers who are unaware of additional charges cannot effectively compare products or negotiate better terms.

Legal and regulatory frameworks

The UK’s robust consumer protection environment offers multiple avenues for redress, from statutory legislation like the Consumer Rights Act 2015 to regulatory guidelines enforced by the Financial Conduct Authority.

Potential remedies

From financial compensation to rescission of contracts, successful claims can deliver meaningful outcomes. In many instances, individuals seek to recover not just financial losses, but also a sense of trust and fairness.

The role of professional assistance

While straightforward cases may be manageable independently, it can be prudent to engage claims management companies or solicitors for more complex disputes. Be sure to examine the credentials and fee structures of any professional service you consider.

Staying vigilant

Transparency in financial services has improved, yet hidden commissions persist. Maintaining awareness, questioning unexplained fees, and comparing market options remain key defences for consumers.

Frequently asked questions

Understanding undisclosed commissions

What exactly constitutes an undisclosed commission?

An undisclosed commission refers to any fee or payment made to an intermediary or agent without clear disclosure to the consumer, meaning the consumer has not explicitly agreed to or fully understood this additional cost.

Are undisclosed commissions always illegal?

Not necessarily. Commissions themselves are often legal; the issue arises when they are concealed, inadequately disclosed, or misrepresented, preventing the consumer from making informed decisions.

Why are undisclosed commissions problematic?

They prevent consumers from understanding the true cost of a financial product or service, potentially leading to inflated prices, unfair deals, and a distortion of consumer choice.

Identifying undisclosed commissions

How can I spot an undisclosed commission in my agreement?

Look for unexplained charges, vague descriptions of fees, inconsistent disclosures, or significantly higher costs compared to similar products available on the market.

What documentation typically reveals undisclosed commissions?

Key documents include contracts, emails, account statements, and official fee breakdowns. Often, commissions appear indirectly through inflated fees or interest rates.

If fees were mentioned briefly but not detailed, does this count as an undisclosed commission?

Potentially yes. Partial disclosure without clear, detailed consent can still be considered inadequate and grounds for a claim.

Legal considerations

Under UK law, what rights do I have if a commission was undisclosed?

You may have the right to seek redress through claims for misrepresentation, breach of contract, unfair contract terms, or breach of fiduciary duty, depending on your specific circumstances.

What laws specifically protect consumers against undisclosed commissions?

Key laws include the Consumer Rights Act 2015, Consumer Credit Act 1974, and regulations enforced by the Financial Conduct Authority (FCA).

Can undisclosed commissions breach fiduciary duty?

Yes, particularly when the intermediary or broker has an explicit duty to act solely in your best interest, such as financial advisors or mortgage brokers.

Making a claim

How long do I have to file a claim about undisclosed commissions?

Generally, you have six years from when the issue occurred or from when you reasonably could have discovered the commission. Exceptions can apply depending on your case specifics.

Is it essential to hire a solicitor to make a claim?

While not essential, professional legal help can significantly enhance your chances, especially in complex cases involving substantial financial sums.

What are the stages involved in a typical claim process?

Common stages include collecting evidence, formal complaint submission, potentially escalating to the Financial Ombudsman Service, or initiating court action if necessary.

Can I still claim if the intermediary has ceased trading?

Yes, you may still claim against the financial institution involved or seek redress through the Financial Ombudsman Service or industry compensation schemes.

Financial implications

Will a successful claim always mean I get money back?

Often, successful claims result in financial compensation, but other outcomes could include contract cancellation, adjustment of terms, or reduced future payments.

Are there costs involved in pursuing an undisclosed commission claim?

There can be costs such as solicitor fees, court costs, or administrative expenses unless you use free services like the Financial Ombudsman or a no-win, no-fee arrangement.

Can making a claim negatively affect my credit score?

Simply raising a claim does not harm your credit score, but withholding payments during a dispute without proper arrangements could impact your credit.

Practical steps and considerations

How should I start if I suspect undisclosed commissions?

Begin by reviewing all relevant documentation and contracts, then formally request clarity or disclosure from the intermediary or institution involved.

What is a Subject Access Request (SAR), and how does it help?

An SAR enables you to request all data a company holds about you, potentially uncovering hidden fees or commissions through detailed records.

If I have multiple agreements, should I check them all for hidden commissions?

Absolutely, especially if you dealt repeatedly with the same broker or financial institution, as this may reveal a pattern of non-disclosure.

Alternative dispute resolution (ADR)

Can I resolve a commission dispute without going to court?

Yes, ADR methods like mediation, arbitration, or the Financial Ombudsman Service can effectively resolve disputes more quickly and less adversarially.

What if I am not satisfied with the Ombudsman’s decision?

While Ombudsman decisions are usually final, you still retain the option to escalate your complaint through the courts if necessary.

Broader implications and consumer protection

How common are undisclosed commission cases in the UK?

Such cases have become increasingly prevalent, reflected by regulatory scrutiny and rising consumer awareness, especially in finance and insurance sectors.

Do undisclosed commissions impact market competition?

Yes, they can distort competition by incentivising intermediaries to recommend higher-commission products, reducing overall market fairness and consumer choice.

Seeking further advice

When should I consider professional advice for my commission claim?

Seek professional advice if your claim involves substantial sums, complex legal arguments, or if initial complaint processes fail to deliver a satisfactory outcome.

Can I seek free advice before deciding to pursue a claim?

Yes, many consumer organisations and initial legal consultations offer free advice, enabling you to understand your position clearly before proceeding.

Still have questions?

If you are unsure about any aspect of undisclosed commissions or how they may relate to your financial agreement, speaking directly with a qualified expert can be invaluable. Your first consultation is free, and it can help you gain clarity on the steps you might take next. An expert can answer your specific questions, review your documents, and suggest potential strategies if you believe you have been affected by hidden fees.

Glossary

Agent

A person or entity authorised to act on behalf of another party (principal) in business dealings, including negotiating or concluding contracts.

Arbitration

A form of alternative dispute resolution where an independent third party, the arbitrator, hears evidence from both sides and makes a binding decision.

Breach of contract

A failure to fulfil obligations agreed upon within a legally enforceable contract.

Breach of fiduciary duty

Occurs when someone entrusted to act in another’s best interests fails to do so, often relevant in cases of undisclosed commissions.

Broker

An individual or company that arranges transactions between buyers and sellers, often earning a commission for facilitating the transaction.

Claims management company (CMC)

A company offering services to manage claims, often handling paperwork and administrative tasks in exchange for a fee or commission.

Commission

A fee paid to an intermediary or broker, typically calculated as a percentage of the transaction's value or price.

Conflict of interest

A situation where an intermediary’s interests conflict with their duty to act fairly or in the consumer’s best interests, potentially exacerbated by undisclosed commissions.

Consumer Credit Act 1974

UK legislation designed to protect consumers entering credit agreements, requiring transparent disclosure of costs, fees, and commissions.

Consumer detriment

A financial or non-financial loss or disadvantage experienced by consumers due to unfair practices, including hidden commissions.

Consumer protection

Legislation and regulatory practices aimed at safeguarding consumers from unfair business practices, misleading contracts, and hidden fees.

Consumer Rights Act 2015

UK legislation aimed at ensuring fairness, transparency, and clarity in consumer contracts, potentially applicable to undisclosed commission cases.

Disclosure

The obligation or practice of clearly informing parties about all relevant information, including fees and commissions, to ensure informed consent.

Duty of care

The legal responsibility of individuals or companies to act reasonably and responsibly, avoiding actions causing harm to others.

Fiduciary

An individual or entity entrusted with the responsibility to act in the best interests of another, often involving heightened obligations of honesty and loyalty.

Financial Conduct Authority (FCA)

The UK regulator responsible for overseeing financial markets, enforcing transparency in commissions and financial advice.

Financial Ombudsman Service (FOS)

A free and independent service resolving disputes between consumers and financial services firms without the need for court action.

Hidden charges

Fees or commissions included in a transaction without clear disclosure or explicit consumer consent, potentially forming the basis of a claim.

Incentivisation

The practice of encouraging certain behaviours or recommendations, potentially leading to biased advice due to undisclosed commissions.

Informed consent

Explicit agreement given by a consumer fully aware of all material facts, including costs, risks, fees, and commissions.

Intermediary

A party, such as an agent or broker, involved in arranging transactions between two other parties, typically receiving a commission.

Kickback

An informal term for an undisclosed or secret commission paid to influence a transaction, typically viewed negatively and potentially unlawful.

Limitation period

A legally defined time limit within which claims, including those regarding undisclosed commissions, must be brought to court.

Material misrepresentation

A false or misleading statement significant enough to influence a person’s decision to enter a contract, often associated with undisclosed commissions.

Mediation

A voluntary, confidential dispute resolution process in which an impartial mediator helps disputing parties reach a mutually acceptable settlement.

Mis-selling

Selling a product or service unsuitable or misleadingly described to the consumer, often linked to undisclosed commissions or conflicts of interest.

Mortgage broker

A specialist intermediary assisting clients to obtain mortgages, often earning commissions from lenders.

Ombudsman

An independent, impartial authority addressing consumer complaints, including those related to financial services and undisclosed commissions.

Pre-action protocol

Steps parties are required to follow before court proceedings, aimed at resolving disputes amicably and efficiently without litigation.

Principal

The party for whom an agent acts or conducts business dealings, often the consumer in commission-related cases.

Procurement

The process through which businesses acquire goods or services, sometimes involving hidden commissions within supplier agreements.

Regulatory guidelines

Official rules issued by regulatory authorities, such as the FCA, specifying standards of transparency and conduct.

Rescission

A legal remedy where a contract is cancelled, returning both parties to their positions before the agreement, often relevant to undisclosed commission disputes.

Secret commission

Another term for an undisclosed commission, emphasising its concealed and potentially unethical nature.

Solicitor

A legally qualified professional authorised to advise and represent individuals or businesses in legal matters, including commission claims.

Subject Access Request (SAR)

A legal procedure enabling consumers to request their personal data held by companies, potentially revealing hidden commissions.

Third-party remuneration

Payments made to intermediaries or third parties for facilitating transactions, including commissions or fees, which may be undisclosed.

Transparency

Clarity and openness in disclosing all relevant details, particularly costs and commissions, allowing informed decision-making.

Unfair contract terms

Contractual terms that significantly disadvantage consumers, potentially unenforceable under the Consumer Rights Act 2015.

Unfair relationship

A legal concept describing situations where terms or practices within consumer credit agreements unfairly disadvantage consumers, potentially including undisclosed commissions.

Undisclosed commission

A commission or fee paid to an intermediary or agent without adequate disclosure to the consumer or party ultimately bearing the cost.

Whistleblowing

The act of reporting unethical or illegal activities, such as the concealment of commissions, typically protected by UK law.

Without prejudice

A legal term indicating communications or settlement offers cannot later be used as evidence against the parties involved in litigation.

Useful organisations

Citizens Advice

Citizens Advice provides free, confidential, and impartial guidance to consumers facing issues related to financial products, hidden charges, or undisclosed commissions. They offer practical advice to help individuals understand their rights and take effective action.

• Phone: 0800 144 8848

• Website: www.citizensadvice.org.uk

Competition and Markets Authority (CMA)

The CMA promotes fair competition and investigates unfair commercial practices, including the impact of undisclosed commissions on market competitiveness. Consumers can report concerns or seek further information about market fairness.

• Phone: 020 3738 6000

• Website: www.gov.uk/cma

Financial Conduct Authority (FCA)

The FCA regulates financial services and markets in the UK, enforcing standards of transparency and fairness in relation to commissions and financial product sales. They offer resources on consumer rights, financial advice, and complaint procedures.

• Phone: 0800 111 6768

• Website: www.fca.org.uk

Financial Ombudsman Service (FOS)

The Financial Ombudsman Service independently resolves complaints between consumers and financial businesses, including cases involving undisclosed commissions. They provide a free dispute resolution service as an alternative to court action.

• Phone: 0800 023 4567

• Website: www.financial-ombudsman.org.uk

Law Society

The Law Society represents solicitors in England and Wales, offering consumer-focused services such as a solicitor search tool, helping consumers find legal professionals experienced in undisclosed commission claims.

• Phone: 020 7242 1222

• Website: www.lawsociety.org.uk

Legal Ombudsman

The Legal Ombudsman independently handles complaints about legal services provided by solicitors or other legal professionals, including disputes related to advice on undisclosed commissions.

• Phone: 0300 555 0333

• Website: www.legalombudsman.org.uk

MoneyHelper

MoneyHelper provides impartial guidance on financial matters, empowering consumers to manage finances effectively, understand hidden costs, and navigate disputes involving undisclosed commissions.

• Phone: 0800 138 7777

• Website: www.moneyhelper.org.uk

StepChange Debt Charity

StepChange offers free advice and support to individuals facing financial hardship or debt issues that may have been exacerbated by hidden charges or undisclosed commissions in financial agreements.

• Phone: 0800 138 1111

• Website: www.stepchange.org

All references

Citizens Advice (2021) Hidden fees and charges in UK financial products, Citizens Advice. https://www.citizensadvice.org.uk/about-us/our-work/policy/policy-research-topics/debt-and-money-policy-research/hidden-costs-in-credit/

Competition and Markets Authority (2023) Annual consumer report, Competition and Markets Authority. https://www.gov.uk/government/publications/cma-annual-report-and-accounts-2022-to-2023

Financial Conduct Authority (2019) Guidance on remuneration and commission disclosure, Financial Conduct Authority. https://www.fca.org.uk/publications/finalised-guidance/fg19-5-remuneration-and-incentives

Financial Ombudsman Service (2020) Insight on commission-related disputes, Financial Ombudsman Service. https://www.financial-ombudsman.org.uk/data-insight/insight/reports

Legal Ombudsman (2022) Advice on financial fairness, Legal Ombudsman. https://www.legalombudsman.org.uk/information-centre/guidance/

Disclaimer

The information provided in this guide is for general informational purposes only and does not constitute professional dental advice. While the content is prepared and backed by a qualified dentist (the “Author”), neither Clearwise nor the Author shall be held liable for any errors, omissions, or outcomes arising from the use of this information. Every individual’s dental situation is unique, and readers should consult with a qualified dentist for personalised advice and treatment plans.

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