Credit, Collections & Insolvency News
Car finance lenders have been granted permission by the Supreme Court to appeal a landmark ruling on motor finance commission payments that has left firms fearing a potential £30 billion compensation bill.
The Court of Appeal ruled in October that paying ‘secret’ commission to car dealers – without disclosing the sum and terms of that commission to borrowers – was unlawful. The Financial Conduct Authority (FCA) had written to the Supreme Court seeking a rapid response to the request.
The decision will include the motor finance commission cases involving: Wrench v FirstRand Bank,), Johnson v FirstRand Bank and Hopcraft & Anr v Close Brothers.
Commenting on the Supreme Court announcement the FCA said in a statement “We welcome the swiftness of the Supreme Court’s decision to hear an appeal against the Court of Appeal’s judgment in three recent motor finance cases involving Close Brothers and FirstRand Bank.
“We previously wrote to the Supreme Court (PDF) asking it to decide quickly whether it will give permission to appeal and, if it does, to determine the substantive appeal as soon as possible. This is because of the potential impact of any judgment on the motor finance market and the many consumers who rely on it. We are considering whether to formally intervene in the case to share our expertise to assist the Court on the substantive appeal.
“We have proposed extending the time firms have to respond to motor finance complaints where a non-discretionary commission arrangement was involved. We will take the Court’s decision to hear the appeal into account as we decide on the outcome of our consultation. We thank everyone that responded to the consultation and will publish our policy statement by 19 December 2024.
Adrian Dally, Director of Motor Finance at the FLA said “Permission to appeal is very good news indeed. The expedited process will give the motor finance sector the needs certainty it needs.”