Summary
Lloyds Banking Group is setting aside nearly £2 billion to deal with claims linked to a car finance scandal involving hidden commissions. The Financial Conduct Authority (FCA) has proposed a compensation scheme for affected customers, potentially affecting around 14 million car finance deals. Lloyds anticipates a substantial financial impact due to the large number of claims.
Key Facts
- Lloyds Banking Group has allocated nearly £2 billion for car finance compensation.
- An additional £800 million has been set aside due to a higher number of expected claims.
- The FCA proposes compensation for deals between 2007 and 2024 involving hidden commissions.
- About 14 million finance deals are affected, with average payouts of £700 each.
- Total lender payouts could reach £8.2 billion.
- The FCA scheme allows free consumer access but offers low interest payouts compared to the PPI scandal.
- The Supreme Court ruling limited the scope of eligible cases for compensation.
- The Finance and Leasing Association argues the FCA's proposed payouts are excessive.
