A survey indicates that more than 23 million people in the UK believe they could receive compensation for mis-sold car finance. 45% of adults think they may be entitled to redress for loans taken between 2007 and 2021. The controversy involves undisclosed commissions between lenders and brokers, which led to inflated finance costs. A Court of Appeal ruling deemed these commissions unlawful, escalating potential liabilities for major lenders. The FCA is developing a redress scheme, but concerns about missing customer records and public trust in lenders remain significant.
More than 23 million people in the UK believe they could be entitled to compensation for mis-sold car finance, indicating a widespread concern about the fairness of financial practices in the industry. The poll found that 45% of UK adults think they may be due compensation for a car loan taken out between 2007 and 2021. Following a Court of Appeal ruling in October 2023 that deemed undisclosed commissions unlawful, lenders could face significant liabilities. As a result, concerns over missing customer records and trust in lenders to manage the compensation process are prevalent.
The car finance controversy hinges on 'secret commission' payments that incentivized brokers to push borrowers to more expensive finance packages. These arrangements have raised alarms similar to the PPI scandal, which cost billions in payouts. The scope of this issue could lead to considerable financial ramifications for lenders, estimated upwards of £44 billion. Consumers are hesitant, demonstrating skepticism towards lenders' ability to fairly handle compensation claims.
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