Asger Risom
Millions of British drivers could soon receive compensation after the Supreme Court delivers a landmark decision on discretionary car finance commissions. The ruling could reshape the industry and cost lenders billions of pounds.
Millions of British drivers could soon receive compensation after the Supreme Court delivers a landmark decision on discretionary car finance commissions. The ruling could reshape the industry and cost lenders billions of pounds.
A Landmark Supreme Court Decision
Today, the Supreme Court will announce its verdict on whether lenders and brokers mis-sold car finance deals by charging discretionary commissions without fully informed customer consent.
What Is Discretionary Commission?
Discretionary commission arrangements allowed brokers to adjust interest rates, often increasing the cost for customers while boosting their own earnings.
Court of Appeal Set the Precedent
An earlier Court of Appeal ruling found that customers should have been given full transparency about commissions. Lenders are now appealing to overturn that decision.
Possible FCA Redress Scheme
If the Supreme Court upholds the verdict, the Financial Conduct Authority (FCA) is expected to roll out a compensation scheme for affected petrol, diesel, and electric car owners.
Potentially Billions in Payouts
Experts warn the industry could face payouts of up to £44 billion, with some drivers possibly owed thousands of pounds each.
Consumer Advocates Call It Exploitation
Alex Neill of Consumer Voice said many buyers trusted dealers to arrange fair loans but were “sold loans without knowing the dealer stood to gain,” calling the practice exploitative and illegal.
Martin Lewis: Drivers Could Be Owed Thousands
Finance expert Martin Lewis has previously explained that individual payouts could reach significant sums, depending on how much interest was added due to commission.
Government Watching Closely
Reports suggest Chancellor Rachel Reeves and Treasury officials are monitoring the case, but the Treasury has said it will allow the legal process to “run its course.”
A Crucial Ruling for Drivers
The Supreme Court’s decision could redefine consumer rights in car finance, potentially forcing lenders and brokers to compensate millions of drivers across the UK.
