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UK supreme court to rule on hidden commissions in car finance

A landmark decision may enable millions of motorists to seek compensation for mis-sold loans.

August 1, 2025 at 09:16 AM

Car finance scandal: UK supreme court poised to rule on hidden commissions

The upcoming verdict could allow millions of drivers to seek compensation for mis-sold car loans.

UK supreme court prepares to rule on £44bn car finance scandal

The UK Supreme Court is about to deliver a critical judgment regarding the £44 billion car finance scandal. This ruling could allow millions of consumers to claim compensation for mis-sold loans due to hidden commissions paid to dealers by lenders. The Court of Appeal previously found these practices unlawful, meaning the justices will decide whether to uphold this judgment or favor the lenders who are contesting it. The case has significant implications, as about 90% of new car purchases involve finance agreements. The Financial Conduct Authority may establish a compensation scheme if the ruling supports consumers.

Key Takeaways

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UK Supreme Court's ruling may impact billions in compensation claims

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Hidden commissions could be deemed unlawful, affecting car loans

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Lenders argue their practices were not wrong, but consumer rights are at stake

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A ruling for consumers could expand the pool of potential claimants

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Lloyds Banking Group has already set aside funds for compensation claims

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The Treasury seeks a balanced judgment to protect consumers and lenders

"The upcoming Supreme Court ruling could allow millions to claim billions in compensation."

This quote emphasizes the potential financial impact on consumers from the court's decision.

"The industry insists it has done nothing wrong, but many consumers beg to differ."

This quote reflects the tension between lenders' claims and the experiences of consumers.

This impending decision could reshape the landscape of car finance in the UK. If the court sides with the drivers, lenders could face unprecedented financial liabilities. This situation highlights ongoing tensions between consumer rights and the financial industry's practices, raising critical questions about transparency in lending. The outcome could provoke stronger scrutiny of how car finance is conducted, impacting both consumers and lenders alike. If the ruling favors consumers, it may trigger a wave of claims, leading to further regulatory changes in the industry.

Highlights

A ruling could change the financial landscape for millions of drivers
Hidden commissions reveal deeper issues within car financing
Consumer rights may finally get a voice in the car finance debate
Will the court defend motorists or protect lenders?

Potential financial fallout from car finance ruling

The Supreme Court's decision could lead to significant compensation payouts for consumers, creating financial strain for lenders and potential backlash against the car finance industry.

The court's decision may signal a turning point in consumer protection within the finance industry.

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uk supreme court car finance compensation hidden commissions finance legal automotive

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