The City watchdog has opened the door to a flood of claims from car customers amid a growing motor finance scandal that could cost lenders as much as £30billion.
The Financial Conduct Authority (FCA) said many customers who took out a loan through a dealer may be owed compensation and has extended the time firms have to respond to complaints.
‘Anyone who is not satisfied with their car finance deal should complain,’ the FCA said. It came as lenders Close Brothers and Investec said they face uncertainty over the impact of the scandal.
New claims: The FCA said many customers who took out a car loan through a dealer may be owed compensation and has extended the time firms have to respond to complaints
Santander UK has set aside £295million to cover the potential cost. Lloyds Banking Group has made a provision of £450million.
Credit ratings agency Moody’s has estimated the total industry cost could reach £30billion, after the Court of Appeal said it was unlawful for dealers to receive a commission from banks without informed consent of customers.
The lenders involved plan to appeal to the Supreme Court. Close Brothers paused UK motor finance lending on October 25, part-restoring it on November 2.
Investec has set aside £30million, saying the appeal outcome and FCA guidance would affect its final bill.
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