Auto Amazon Links: No products found. Blocked by captcha.
Rachel Clun, a business reporter at BBC News, reported that a recent Supreme Court ruling has determined that millions of motorists will not be able to claim compensation for hidden commissions paid on car loans. The court sided with finance companies in two out of three crucial test cases focusing on commission payments made by banks and other lenders to car dealers. This decision reversed prior court rulings that had opened the possibility of large-scale compensation claims akin to the PPI mis-selling scandal. However, drivers who took out a specific type of finance deal may still be eligible for payouts as the UK’s financial regulator considers implementing a compensation scheme.
The Supreme Court heard three cases in a joint appeal brought by FirstRand bank and Close Brothers challenging a Court of Appeal ruling that deemed it unlawful for car dealers to receive hidden commissions from lenders before 2021. This ruling opened the door for potential compensation claims for millions of motorists and exposed lenders to significant payouts. In its decision, the court disagreed with motorists who argued that car dealers had a fiduciary duty to prioritize the customer’s needs, emphasizing that no explicit guarantee of putting aside commercial interests was made by the dealers. The ruling went against the lender in one instance, awarding Mr. Marcus Johnson a commission refund plus interest.
While the scope of industry-wide compensation claims has been narrowed due to the Supreme Court ruling, numerous individuals could still receive payouts. Approximately four in 10 cars sold before 2021 were sold through discretionary commission arrangements, a method since banned. Richard Barnwell, a partner at advisory firm BDO, noted that affected individuals could qualify for redress if such arrangements are deemed unfair, potentially leading to compensation totaling £5 – £13 billion or more. Martin Lewis, founder of Money Saving Expert, estimated that compensation payments could reach £10 billion and anticipated a redress scheme for Discretionary Commission Arrangements. The Financial Conduct Authority (FCA) is expected to announce whether a consultation on a redress scheme will be initiated soon
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.