Lenders have avoided potentially having to pay compensation to millions of drivers, after the Supreme Court ruled they are not liable for hidden commission payments in car finance schemes, but some motorists may still receive payouts.
The UK’s highest court ruled that car dealers did not have a relationship with their customers that would require them to act “altruistically” in the customers’ interest.
The decision comes after two lenders, FirstRand Bank and Close Brothers, challenged a Court of Appeal ruling which found “secret” commission payments, paid by buyers to dealers as part of finance arrangements made before 2021, without the motorist’s fully informed consent, were unlawful.
The ruling in October last year found that three motorists, who all bought their cars before 2021, should receive compensation after they were not told either clearly enough or at all that the car dealers, acting as credit brokers, would receive a commission from the lenders for introducing business to them.
However, the Supreme Court judges said that some customers could still receive payouts by bringing claims under the Consumer Credit Act (CCA).
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