Millions of pounds of compensation payments are being readied by lenders after an investigation was launched into the mis-selling of car finance over more than a decade. The issue concerns so-called discretionary commission arrangements , sold between 2007 and 2020, that allowed dealers and brokers to adjust lenders’ interest rates to reward themselves with commission payments on hire purchase and personal contract purchase deals.
Experts say the FCA’s action suggests the authority suspects lenders may have a case to answer, causing those who believe they are exposed to begin preparing for its next statement in September, when the FCA will explain how consumers can make claims against lenders. Among those gearing up for the worst is Lloyds, owner of Black Horse, a leading lender of car finance and believed to be most exposed.