‘Secret’ car loan commissions: Why motorists could be owed thousands

A landmark London court ruling that could expose motor finance providers to billions of pounds in extra compensation.

On Friday, the Court of Appeal resoundingly sided with consumers and ruled it unlawful for car dealers to get a commission from lenders “without obtaining the customer’s fully informed consent to the payment”.

The test case is set to influence the Financial Conduct Authority’s (FCA) decision on whether to implement a punitive redress scheme as part of its probe into the so-called discretionary commission agreements (DCAs).

The agreements allowed brokers to adjust interest rates on car finance without the knowledge of the borrower.

The ruling sent shares in some of the most exposed banks down sharply on Friday and further today as investors digested the decision.

Correction:
1:13 RBC's worst-case estimate for Santander UK is £1.8bn

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Produced by: Lars Mucklejohn, Scarlett Wild, Larissa Howie