You may have seen reference to a new mis-selling scandal that is likely to dwarf the scale of rebates paid out under the PPI scandals of yester year.
The Court of Appeal have handed down a landmark decision – siding with consumers against financial institutions when providing car finance loans. The impact is so severe, that many financiers, car dealerships and manufacturers have put the brakes on offering finance to purchasers, pending a likely determination in the Supreme Court. This decision may have an unintended consequence on the future availability of car manufacturing quotas and their financing.
The Court of Appeal have determined that those car buyers using finance deals, were not made aware of the commission arrangements between the brokers (dealers) and lenders and were thus unable to give their informed
consent to the arrangement. Consumers would have needed to be aware of the amount of commission to be paid and how it was calculated for example. Deals made between April 2007 and January 2021 are subject to potential consumer clawback payments as the discretionary commission arrangements were banned thereafter. Close Brothers and Lloyds/Black Horse alone stand to have to make repayments totalling £850m alone with the other banks looking nervously along. It may well be time to root out your old car finance papers folks.
Watch this space. (The average pay out is anticipated to be in excess of £1100.00).
If you wish to seek advice or make a claim, please contact our Litigation Department by telephone on 01233 665544, or via email at enquiries@kingsfords.net to discuss the options open to you.