Cars: Loans
The question
To ask the Chancellor of the Exchequer, if she will take steps to help ensure that consumers impacted by mis-sold car finance deals receive compensation.
Answered by Lucy Rigby
The Supreme Court has now clarified the law in relation to commission practices in the motor finance sector. The government respects the Supreme Court’s judgment and is working closely with the Financial Conduct Authority and Prudential Regulation Authority to understand the impact for both firms and consumers.
The government notes the recent statement by the Financial Conduct Authority that it will be consulting on a consumer redress scheme in October. The FCA propose that the scheme covers discretionary commission arrangements - a practice banned in 2021 that allowed dealers to vary interest rates for higher commissions. The FCA will also consult on which non-discretionary commission agreements should be included.
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