Car finance mis-selling scandal: Millions of drivers denied payouts after Supreme Court ruling
Why millions of motorists denied payouts after car finance court ruling
- The Supreme Court ruled that car finance lenders are not liable for hidden commission payments to millions of drivers, overturning a previous Court of Appeal decision.
- This decision significantly reduces the potential compensation payout for lenders from an estimated £45bn to between £5bn and £15bn.
- The court rejected arguments that the payments were 'bribes' or that car dealers had a 'fiduciary duty' to customers, but upheld one case where the finance relationship was deemed unfair.
- Despite the ruling, consumers who paid particularly large commissions may still be eligible for compensation under the Consumer Credit Act.
- The Financial Conduct Authority is expected to announce a redress scheme for cases where the relationship is deemed unfair, with experts advising consumers to await further guidance.