Supreme Court allows appeal against UK car finance ruling | banking

The Supreme Court has allowed two car lenders to appeal a landmark ruling on car finance fee payments that left companies fearful of a potential $30 billion compensation claim.

The decision gives Close Brothers and MotoNovo owner FirstRand the opportunity to overturn a shock court ruling last October that found it illegal to pay secret fees to car dealers without disclosing the amount and terms of the fees to borrowers.

The appeal court's decision goes beyond existing city regulations and an investigation by the Financial Conduct Authority and opens the door to a flood of new claims that credit rating agency Moodys now says could cost lenders up to $30 billion in losses. .

News that the Supreme Court took up the case boosted the auto lender's stock price. Close Brothers rose as much as 8%, Lloyds Banking Group, which owns the Black Horse car lending business, rose 4% and Barclays rose 1.6%.

The Supreme Court has not yet set a date for the hearing, but has said it will be held until April 16, 2025, when the next legal term ends. A decision could come next summer or fall.

The relatively quick processing time follows a petition from the Financial Conduct Authority calling for a speedy hearing that could end uncertainty for lenders and consumers.

We have previously written to the Supreme Court asking it to decide quickly whether to grant permission to appeal and, if so, to decide on the substantive appeal as soon as possible, the FCA said on Wednesday. This is because every decision has a potential impact on the car finance market and the many consumers who depend on it. We are considering whether to formally intervene in the case to share our expertise to assist the court on the substantive appeal.

The Finance and Leasing Association lobby group, which represents car lenders ranging from large banks such as Lloyds and Barclays to the finance arms of car manufacturers including Ford and Volkswagen, welcomed the Supreme Court's decision to hear the case. Adrian Dally, Director of Automotive Finance, said: The permission to appeal is really good news. A faster process will provide much-needed certainty to the automotive finance sector.

However, it is still unclear whether all car finance claims currently listed in county courts will be paused.

A spokeswoman for Aldermore, the FirstRands UK lender that operates MotoNovo, declined to comment. Close Brothers said the lender would not comment further on the ongoing appeals process and further announcements would be made when appropriate.

The FCA has been trying to identify the flood of claims hitting car lenders. Regulators have already paused complaints about the Discretionary Commission Scheme (DCA), which gives car dealerships and brokers the power to set interest rates on car loans and collect higher commissions as their numbers grow. The practice was eventually banned by the FCA in 2021 amid concerns that it encouraged dealers and brokers to raise costs for consumers. The FCA is expected to receive a stay of up to 12 months on complaints related to the October court ruling by next week.

Skip past newsletter promotions

Join our business today

Get ready for your work day. All the business news and analysis you need every morning.

Privacy Policy: Our newsletter may contain information about charities, online advertising and externally funded content. Please see our privacy policy for more details. We use Google reCaptcha to secure our website, which is subject to the Google Privacy Policy and Terms of Service.

After newsletter promotion

But it is unclear how costly the issue could be for lenders, who are likely to have to pay tens of billions of pounds to borrowers until the FCA investigation and Supreme Court ruling are concluded.

On Tuesday, the FCA's top lawyer, Stephen Braviner Roman, gave the biggest indication yet that the Motor Finance Commission controversy could rival the scale of the Payment Protection Insurance (PPI) scandal, which cost the bank $50 billion in losses. . He told Finance Committee members: We said earlier that if you look at DCA alone, we don't think it's PPI scale. But that was a time when we were only looking at DCA. So, I think it is premature to say that the current PPI scale is definitely not.

FCA chief executive Nikhil Rathi attempted to walk back the comments hours later during an appearance on Martin Lewis' Money Live show. Rathi said: It is more likely that there will be a corrective plan. [set up by the FCA] I can't necessarily say that PPI will be as big as it was when we started this. We had to see what the court had to say and judge.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos