Tag #Car Finance Scandal

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theguardian.com

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Aug 3, 19:17

FCA to Pay £9bn-£18bn in Car Finance Compensation

The UK's Financial Conduct Authority will launch a redress scheme costing banks £9bn-£18bn to compensate millions of drivers for mis-sold car finance, impacting approximately 14.6 million contracts between 2007 and 2020 due to unlawful discretionary commission arrangements.

FCA to Pay £9bn-£18bn in Car Finance Compensation

The UK's Financial Conduct Authority will launch a redress scheme costing banks £9bn-£18bn to compensate millions of drivers for mis-sold car finance, impacting approximately 14.6 million contracts between 2007 and 2020 due to unlawful discretionary commission arrangements.

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What are the potential long-term consequences for the car finance market and consumer access to affordable loans?

The FCA's approach attempts to mitigate the risk of market instability while ensuring fair compensation. The scheme's design, focusing on individual payouts unlikely to exceed £950 plus accrued interest, suggests a cautious approach. Future implications include potential adjustments to lending practices and increased scrutiny of commission structures within the motor finance sector.

news.sky.com

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Mar 12, 19:14

FCA Investigates Mis-Sold Car Finance, Potentially Costing Lenders Hundreds of Millions

The UK's Financial Conduct Authority (FCA) investigates potential mis-selling of car finance, potentially costing lenders hundreds of millions in compensation due to brokers incentivized to place customers on higher interest rates before a 2021 ban.

FCA Investigates Mis-Sold Car Finance, Potentially Costing Lenders Hundreds of Millions

The UK's Financial Conduct Authority (FCA) investigates potential mis-selling of car finance, potentially costing lenders hundreds of millions in compensation due to brokers incentivized to place customers on higher interest rates before a 2021 ban.

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How did the structure of lender-broker commissions incentivize the mis-selling of car finance products?

Before 2021, some lenders used "discretionary commission arrangements" (DCAs) that rewarded brokers for placing customers on higher interest rates. The FCA banned this practice, but a Court of Appeal ruling sided with consumers claiming mis-selling, potentially impacting millions of past loans.

theguardian.com

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Aug 1, 19:17

Supreme Court Limits Car Finance Scandal Compensation

The UK Supreme Court partially overturned a lower court ruling on the car finance commission scandal, limiting consumer compensation and potentially saving lenders billions of pounds, but leaving the door open for a limited FCA compensation scheme.

Supreme Court Limits Car Finance Scandal Compensation

The UK Supreme Court partially overturned a lower court ruling on the car finance commission scandal, limiting consumer compensation and potentially saving lenders billions of pounds, but leaving the door open for a limited FCA compensation scheme.

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What are the potential long-term implications of this ruling for the car finance industry and consumer protection regulations?

The Supreme Court's decision may lead to a more limited compensation scheme through the Financial Conduct Authority (FCA), focusing on loans with "discretionary commission arrangements." This approach, while potentially avoiding the massive cost initially anticipated, could leave many consumers without recourse. The FCA aims to launch this scheme within six weeks.

dailymail.co.uk

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Jan 22, 01:08

UK Government Intervention Limits Car Finance Mis-selling Payouts, Boosting Lender Shares

The UK Treasury is seeking to limit compensation payouts in a multi-billion pound car finance mis-selling case, causing shares in affected lenders to rise sharply, despite the potential for industry disruption.

UK Government Intervention Limits Car Finance Mis-selling Payouts, Boosting Lender Shares

The UK Treasury is seeking to limit compensation payouts in a multi-billion pound car finance mis-selling case, causing shares in affected lenders to rise sharply, despite the potential for industry disruption.

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How might the government's attempt to limit compensation payouts in the car finance scandal affect the broader UK economy and consumer confidence?

The UK Treasury's intervention in the Supreme Court case highlights concerns about the industry's stability and the potential for a major financial crisis similar to the PPI scandal. Approximately 80% of new car purchases rely on financing, meaning significant payouts could disrupt the market, impacting both lenders and consumers.

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