Auto lenders in the UK could face up to £13 billion in restitution as the Financial Conduct Authority (FCA) probes commission agreements that allegedly led to consumers overpaying as far back as 2007, as reported by the Financial Times.
The FCA is investigating the use of "discretionary commissions," which incentivized finance brokers and dealers to raise interest rates on auto loans until the practice was banned in 2021. Some of the UK's biggest banks — including Lloyds, Barclays, and Santander — have substantial exposure to these costs. Lloyd's alone could be on the hook for up to £1.8 billion, as it owns the country's largest auto lender, Black Horse.
This content is available to paid Members of Starling Insights.
If you are a Member of Starling Insights, you can sign in below to access this item.
If you are not a member, please consider joining Starling Insights to support our work and get access to our entire platform. Enjoy hundreds of articles and related content from past editions of the Compendium, special video and print reports, as well as Starling's observations and comments on current issues in culture & conduct risk management.