Lloyds Banking Group is reserving nearly £2bn to cover potential compensation claims related to a car finance scandal involving hidden commissions, with the FCA proposing a scheme that could cost lenders up to £8.2bn. The bank expects more claims than initially thought, and the scheme aims to compensate millions of drivers for unfair deals made between 2007 and 2024. Industry and consumer reactions vary, with some lenders increasing provisions and campaigners urging swift action.
The UK's financial regulator's proposed compensation scheme for car finance mis-selling faces criticism for being impractical due to the difficulty in retrieving old records and defining unfair agreements, with industry bodies warning of high costs and potential impacts on borrowing costs, though recent court rulings have limited the scope of potential payouts.
Victims of car finance mis-selling are expected to receive less than £950 per deal through a proposed compensation scheme by the FCA, with the first payouts anticipated next year. The Supreme Court ruled that hidden commissions from lenders to dealers were not unlawful, but left open the possibility for claims related to large commissions deemed unfair. The FCA plans to consult on eligibility and payout amounts, covering agreements from 2007 onwards, with the industry expected to bear the costs.
The UK's Supreme Court has ruled against allowing claims for compensation related to hidden commissions in car finance, closing a major legal avenue for millions of motorists, though some claimants remain determined to pursue individual claims and the FCA is considering a compensation scheme.
The UK Supreme Court limited the potential compensation payouts for car finance mis-selling, ruling that most claims based on undisclosed commissions are invalid, though some cases with egregious misconduct may still lead to billions in redress. The industry has avoided a massive payout, but some claims remain possible, especially related to unfair agreements and discretionary commission deals, with estimates still reaching up to £13bn.
The UK's Supreme Court ruled in favor of finance companies in two out of three cases regarding hidden commissions paid on car loans, significantly narrowing the scope for motorists to claim compensation, though some affected drivers may still be eligible for payouts. The decision impacts millions of car buyers and could lead to billions in redress, with the FCA considering a compensation scheme and the industry awaiting further regulatory guidance.
The UK Supreme Court is ruling on whether millions of motorists can claim compensation for mis-sold car finance, specifically regarding hidden commissions paid to dealers, with the decision potentially impacting the car industry and consumer rights.
The UK's Supreme Court is set to decide whether hidden commission payments to car dealers were unlawful, a ruling that could lead to millions of motorists claiming compensation for mis-sold car finance agreements, potentially costing lenders billions and impacting the UK economy.
