The Supreme Court has granted permission for two car lenders to appeal a landmark ruling on motor finance commission payments that has raised concerns over a potential huge compensation bill.
Close Brothers and FirstRand, the owner of MotoNovo, now have an opportunity to challenge an October 25 Court of Appeal ruling that deemed paying undisclosed “secret” commissions to car dealers – without informing borrowers of the amount or terms – unlawful.
The Court of Appeal’s decision based on common law cut across existing City regulations and Financial Conduct Authority’s (FCA) ongoing investigation into discretionary commission arrangements, opening the door to a surge of claims with ratings agency Moody’s estimating these claims could cost the industry up to £30 billion.
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