UK auto lenders may have to pay out between £9 and £18 billion to drivers under a compensation scheme planned by the Financial Conduct Authority (FCA) for historic car finance mis-selling, as reported by the Financial Times.
A Supreme Court judgment last week narrowed — but did not eliminate — the industry's legal exposure to the scandal, which was previously estimated to cost lenders as much as £44 billion to resolve. The scandal stems from auto lenders' use of "discretionary commissions," which incentivized finance brokers and dealers to raise interest rates on auto loans.
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