BMW has allocated over £70 million in anticipation of customer compensation claims due to litigation surrounding undisclosed commissions, which has raised regulatory scrutiny across the motor finance sector.
The Court of Appeal ruling has expanded responsibility for lenders, making them liable for undisclosed commission structures. This shift signifies an important move towards transparency in the finance industry.
In light of the FCA's ban on discretionary commissions, BMW and several other lenders are taking proactive measures to comply with new regulations and address customer complaints from as far back as 2007.
As the industry braces for compensation claims, major players like Lloyds Banking Group and FirstRand have set aside significant funds to ensure they can manage the expected liabilities.
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