A recent Court of Appeal ruling found car dealerships and lenders liable for failing to disclose commissions to customers, potentially unleashing billions in compensation claims.
The Financial Conduct Authority (FCA) began investigating potential misselling of motor finance commissions, with banks setting aside provisions anticipating compensation claims.
The potential industry-wide cost is now estimated at £6 billion to £16 billion, with many lenders bracing for significant financial losses.
This judgment could lead to operational disruptions as banks are required to now disclose commissions and obtain explicit consent from customers.
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