More than 23 million people in the UK believe they could be entitled to compensation for mis-sold car finance, according to a new survey, as the country braces for a landmark Supreme Court decision that could unlock tens of billions in redress.
The poll, conducted on behalf of consumer law firm Slater and Gordon, found that 45% of UK adults think they may be due compensation for a car loan taken out between 2007 and 2021. The potential fallout has drawn comparisons to the notorious payment protection insurance (PPI) scandal, which resulted in more than £50 billion in payouts to consumers.
The car finance controversy centres on “secret commission” arrangements between lenders and car dealers — deals where brokers received undisclosed commission payments for arranging car loans. In many cases, those payments incentivised brokers to push borrowers towards more expensive finance packages, inflating costs without the customer’s knowledge.
The scandal escalated in October 2023, when the Court of Appeal ruled that undisclosed commissions were unlawful, expanding the scope of an ongoing Financial Conduct Authority (FCA) investigation. Lenders including Santander UK, Barclays, Lloyds, and Close Brothers could collectively face redress liabilities of up to £44 billion, according to some analyst estimates.
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