The Supreme Court largely favored banks in a significant ruling on Friday regarding whether consumers were misled on car finance as banks paid large commissions to motor brokers. However, judges sustained the appeal of a consumer due to the commission’s size and its disclosure by the bank to the motor dealer.
The regulator stated, “Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way.”
The FCA plans an October consultation to define a potential compensation scheme’s structure. This facility would address both discretionary and non-discretionary commission arrangements, with the harm’s extent shaping the methodology.
Considerations will include the need for interest on awards, the possible retroactive date to 2007, and whether customers must opt in or opt out.
If implemented, compensation scheme payments are expected to start in 2026, according to the FCA.
Fiona Maxwell contributed to this report.
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