Millions of British drivers could be issued compensation in a Supreme Court ruling over previous car finance agreements today. After months of investigations and debates, within hours the Supreme Court will announce whether firms were in the wrong over charging customers discretionary commission arrangements.
It comes after Close Brothers Motor Finance were among those seeking to overturn an earlier Court of Appeal judgement which said brokers must have customers’ fully informed consent to receive commission. If the Supreme Court upholds the verdict, the Financial Conduct Authority (FCA) will likely press ahead with plans for a redress scheme to issue compensation to petrol, diesel and electric car owners affected. It means individuals affected would be paid out an amount decided by the FCA.
Finance experts such as Martin Lewis have previously explained that drivers could be owed “thousands” if payouts went ahead.
Alex Neill, co-founder of Consumer Voice, said the decision was “crucial” to ensure lenders were “held accountable” over their actions.
He explained: “Millions of people trusted their dealer to help them get a fair deal, but were sold loans without knowing the dealer stood to gain. That’s not just unfair – it’s exploitative and illegal.
“If the courts rule that consumers deserve redress, we expect the financial regulator to introduce a scheme that gives drivers back what they’re owed.
“This is a crucial opportunity to restore trust, uphold the rule of law, and make sure lenders and brokers are held accountable.”
Experts have previously predicted that the controversy could cost the industry an eye-watering £44billion.
The seismic figure has spooked officials with reports last week that Chancellor Rachel Reeves could intervene to overrule the decision.
Meanwhile, Treasury chiefs have looked into the possibility of passing new rules to cut the potential compensation bill. However, HM Treasury didn’t get drawn into the rumours last week and promised to let the process “run its course”.
They told the Daily Express: “We don’t comment on speculation. We want to see a balanced judgment that delivers compensation proportionate to losses that consumers have suffered and allows the motor finance sector to continue supporting millions of motorists to own vehicles. It is now appropriate to let the appeals process run its course.”