The UK’s highest court blocked Chancellor Rachel Reeves’ efforts to intervene in a groundbreaking case involving controversial car loans, which could have huge ramifications for the ongoing missold car finance scandal.
At the start of April, A Supreme Court case reviewed appeals made by finance companies, individuals and government bodies, who offered their advice on the contracts following a previous ruling by the Court of Appeal. The appeal challenges the legality of lenders offering dealers commissions without obtaining customer consent, leading to accusations of them making illegitimate profits from missold car finance.
However, the Court has denied an intervention from the Treasury, who cited the “potential [for the case] to cause considerable economic harm” to the UK economy.
In a statement, the Supreme Court noted that if clients were not made aware of the agreement, they should receive restitution. This scandal could result in the industry being required to disburse a considerable sum of up to £30bn for missold car finance.
Most new cars, along with numerous used ones, are purchased through finance agreements, such as PCP, which has led to potentially thousands of missold car finance contracts.
WHEN WAS THIS SCANDAL FIRST UNCOVERED?
In 2021, the Financial Conduct Authority (FCA) prohibited transactions where the lender paid the dealer a commission determined by the customer’s interest rate. The buyer would be incentivised to purchase a more expensive car, in turn increasing the commission for the lender, without the knowledge of the consumer. These Discretionary Commission Arrangements (DCAs) have led to missold finance agreements on a huge scale.
According to experts, the potential total amount of compensation for this bill could surpass that of the PPI scandal and become the largest scheme associated with financial products.
DO YOU THINK YOU’VE MISSOLD CAR FINANCE?
FILL IN OUR CLAIM CHECKER TODAY TO FIND OUT IF YOU COULD BE ELIGIBLE FOR COMPENSATION
As a case in the Court of Appeal approaches, take action now to determine if you qualify for reimbursement regarding your missold car finance. The scope of the FCA’s investigation is continuously expanding, potentially affecting many drivers who may be entitled to financial redress.
By submitting your details on our form, we will be able to quickly and easily check if you have a claim, and contact your lender on your behalf. At Friends Legal, our knowledgeable team will work to ensure that you receive the full compensation you deserve. Our solicitors operate on a no-win, no-fee basis so you can sleep easy knowing that if your claim is not successful, you will not be charged.
