Car finance judgement 'a hard pill to swallow'
Summary
The UK's Supreme Court ruled against claims that hidden commission payments to car dealers were unlawful, impacting many motorists' ability to claim compensation for motor finance mis-selling. However, the court left room for claims where large, unfair commissions were involved. This decision reduces potential claims significantly, but still allows for some legal actions.Key Facts
- The UK Supreme Court made a decision affecting car finance compensation claims.
- Hidden commissions paid to car dealers were claimed to be unlawful, but the court disagreed.
- The possibility for compensation claims remains for cases involving large, unfair commissions.
- The potential compensation claims could have been around £30 billion, but might now be between £5 billion and £13 billion according to BDO.
- Discretionary commission arrangements, which allowed dealers to get more commission for higher loans, were banned in 2021.
- Marcus Johnson, one of the claimants, received compensation due to an unfair relationship with his lender.
- Andrew Wrench, another claimant, highlighted the importance of accountability and honesty in finance practices.
- Some claimants still plan to pursue their compensation claims despite the court's mixed ruling.
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