The core problem we keep seeing

• Commission and remuneration aren’t examined end-to-end. Most GAP sales involve two or more of: manufacturer/“producer”, underwriter, administrator, distributor, seller (dealership generally), and lender. Yet FOS casework investigators, and even Ombudsmen, regularly omits a full commission/remuneration breakdown across that chain. When the chain isn’t mapped, fair value cannot be tested.
• Fair-value evidence (PROD 4.2) isn’t even requested. Sellers/manufacturers must be able to evidence that total price (including commissions/fees) represents fair value to the consumer. If the fair-value assessment isn’t on the file, the investigation is missing a salient document.
• Result: We’re lodging additional service complaints and having to re-educate FOS — not because we want to, but because key evidence isn’t being gathered and obvious issues aren’t being engaged.

The regulator has already told us what the problem is

In 2024, the FCA asked the overwhelming majority of the GAP market to pause sales as a result of fair-value concerns. Public information highlighted very low claims ratios and significant commission take-out in almost all distribution chains. Later in 2024, firms were allowed to resume only after demonstrating fair value, with materially lower commissions going forward.

That is the smoking gun: if sales can restart only with substantially reduced commission, fair value clearly wasn’t there before.

What FOS needs to do better, and as a minimum

1. Always obtain the fair-value assessment (FVA) relevant to the sale and read it alongside actual commission flows (base + variable + profit-share/volume + any premium-finance payments).
2. Map the distribution chain (who got paid, how much, for doing what). Without this, neither “price” nor “value” is intelligible.
3. Check term alignment Was the policy term co-extensive with the finance term (especially PCP with a balloon)?. Again, term mismatches clearly affects fair value.
4. Apply the public context: the FCA’s pause and “materially lower commission” resumption aren’t trivia; they are central indicators about value drivers in GAP and must be the starting point to any investigation.

Why this matters for consumers

If investigators don’t demand the Fair Value Assessment and a full commission breakdown, a £400 “premium” might be assessed as “reasonable” when a large, undisclosed slice was never the price of insurance at all. That’s not a fair-value investigation; it’s a box-tick in favour of the finance and insurance industry to the detriment of consumers (yet again).

We’ll keep pushing — and helping FOS

We will continue to raise service complaints and challenging FOS where casework overlooks commission and fair-value evidence, and we’ll keep submitting clear, structured bundles so the right questions are asked. Education within FOS is clearly needed, which we are providing.