Moody's has warned that ongoing scandals surrounding mis-sold motor finance could hit lenders with compensation bills reaching up to £30 billion, echoing the PPI crisis.
The FCA's ban on discretionary commissions has intensified scrutiny of the motor finance industry, raising fears that lenders, especially smaller ones, may face severe financial repercussions.
Consumer complaints have surged following the FCA's intervention, leading to a broader review that may require lenders to compensate borrowers affected by undisclosed commissions.
A recent Court of Appeal ruling which deemed undisclosed commissions unlawful could escalate the financial liabilities for lenders, potentially exacerbating their compensation costs.
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