The consumer champion Martin Lewis suggests the row "has the potential to shake up more than just car finance".
So what has happened and could you be entitled to a payout?
How did we get here?
In January, the FCA launched an investigation into discretionary commission arrangements (DCAs) on car loans issued between 2007 and 2021. The practice meant car dealerships and brokers had the power to set interest rates on loans, and earn higher commission along the way. DCAs were banned by the FCA in 2021 because of concerns they were incentivising dealers to charge higher interest rates.
The City regulator's investigation could lead to a multibillion-pound compensation scheme funded by the lenders that sat behind the arrangements. The FCA has already warned car lenders to hold back cash for potential payouts, which some analysts believe could add up to £8bn-£13bn.
The watchdog had been due to issue its decision in September, but pushed its deadline to the end of May 2025 after lenders struggled to provide all the data in time. But that delay also gave it time to judge the outcome of a test case against the specialist lenders Close Brothers and FirstRand Bank.
What happened last week?
Last Friday, the court of appeal ruled on that test case, with the judges upholding a decision that it was unlawful for the two lenders to have paid a "secret" commission to car dealers without borrowers' knowledge.
The judges said consumers needed to know all the material facts that could affect their borrowing decision, including the total commission to car dealers and how it was calculated, in order to be able to consent to the loan.
Some lawyers have speculated that customers could collectively receive billions of pounds in compensation as a result, and in some cases could have their car loan written off or rescinded.
Denne historien er fra November 01, 2024-utgaven av The Guardian.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra November 01, 2024-utgaven av The Guardian.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Captains Stokes and Buttler sign new central contracts
England's two men's captains, Ben Stokes and Jos Buttler, have both signed new two-year central contracts.
Canadian judge halts medically assisted death of woman in rare injunction
A British Columbia judge has issued a rare, last-minute injunction barring a woman from accessing euthanasia after physicians in her home province refused to approve the request.
Spain in mourning as death toll from catastrophic floods rises to more than 150
The death toll from devastating floods in eastern Spain has risen to more than 150, regional authorities and emergency services have said, as the country began three days of mourning and the prime minister, Pedro Sánchez, urged people to stay at home.
Middlesex urged to review culture and behaviour
Middlesex County Cricket Club should undertake a formal review of its culture, governance and the behaviour of staff members, according to the sport's regulator.
'Angry' Spurs passing test of mettle hints at prosperous future
Home fans almost expected Tottenham to blow a 2-0 lead over Manchester City. The victory could prove cathartic
“The soap opera is ending” Amorim makes ambition clear after he agrees United deal
Rúben Amorim says he has to \"prove something\" after agreeing to become Manchester United's head coach.
Van Nistelrooy accepts his short stint as leading man
Dutchman hopes his interim role will be the first step in 'helping the club move forward' for new manager
Forest owner Marinakis sues Greek rival over alleged smears
Nottingham Forest's owner, Evangelos Marinakis, is suing a Greek football rival for more than £2.1m in a high court libel claim over an alleged \"smear campaign\", including \"false\" allegations of match-fixing.
Draper runs out of steam as breakout year concludes
It was not until 10 pm on Wednesday night that Jack Draper finally returned to the locker room after his tenacious victory over the world No 6 Taylor Fritz.
Hamilton says Verstappen has not changed reckless style
Lewis Hamilton maintains Max Verstappen has continued with an unacceptable driving style since the pair vied for the world championship in 2021.
