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UK Auto Lenders Face Ruinous Scandal

UK Auto Lenders Face Ruinous Scandal

by Starling Insights

Starling Insights Editorial Board

Nov 13, 2024

Observations

In a recent opinion article in the Financial Times, journalist John Gapper explores the potentially ruinous consequences of the UK auto finance industry's misselling scandal.

Earlier this year, the UK Financial Conduct Authority (FCA) launched a probe into auto lenders' use of "discretionary commissions," which incentivized finance brokers and dealers to raise interest rates on auto loans. The practice was commonplace in the industry until it was banned by the FCA in 2021.

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