Court of appeal ruling – 25th October 2024
New Judgment gives the opinion that it is/was unlawful for car dealers to accept commissions from lenders without obtaining informed customer consent.
This ruling potentially better paves the way for widespread compensation claims. The ruling should also extent the time window in which mis-sold car finance products were potentially affected, past the 2007-2021 cutoff previously suggested by the FCA.
Though discretionary commissions were banned in 2021, the Court’s ruling broadens the scope, giving even more consumers potential to claim compensation, for being misled.
The ruling had brought sharp focus on the Financial Conduct Authority (FCA) which has allegedly only been investigating commission arrangements where dealers raised loan interest rates to increase commissions. The hidden commission meant consumers paid more for car finance.
The FCA is now forced to considering extending both the complaint scope and deadlines for consumers. All consumers are being advised to inquire about any commissions on their car loans, as they may be owed compensation.
Moody’s, the credit ratings agency, predicted the court ruling could leave banks on the hook for as much as £30 billion in consumer redress.