{"id":39034,"title":"Treasury Steps In To Limit Car Finance Misselling Compensation Claims","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2025-01-24T04:53:23+00:00","modified":"2025-01-23T20:58:09+00:00","canonical_url":"https://stockmark.it/treasury-steps-in-to-limit-car-finance-misselling-compensation-claims/","markdown_url":"https://stockmark.it/treasury-steps-in-to-limit-car-finance-misselling-compensation-claims.md","json_url":"https://stockmark.it/treasury-steps-in-to-limit-car-finance-misselling-compensation-claims.json","category":"Automotive","categories":["Automotive","Financial"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.stockmark-it-23-2.jpg?fit=1200%2C800&quality=89&ssl=1","format":"news","language":"en-GB","content":"The UK government’s Treasury department has made an unprecedented move to intervene in a Supreme Court case concerning car finance misselling, sparking optimism that the industry might avoid paying out tens of billions of pounds in compensation.\n\nMarket reaction was swift and positive, with shares in Close Brothers, a merchant bank heavily exposed to car loans, surging 21.6 per cent to 297½p. Lloyds Banking Group, which operates the Black Horse vehicle finance business, saw its shares climb 4 per cent to 61p.\n\nThe Treasury’s intervention signals mounting concerns about the potential scale of compensation payments, which some analysts compare to the £50 billion Payment Protection Insurance scandal. Moody’s analysts estimate the car finance industry could face bills of £30 billion, while HSBC projects potential costs reaching £44 billion.\n\nSeveral major lenders have already begun preparing for potential payouts. Lloys Banking Group has set aside £450 million, while Santander UK has allocated £295 million for compensation claims. The government’s primary objective appears to be ensuring any redress remains “proportionate” while protecting Britain’s regulatory competitiveness.\n\nThe scandal’s scope expanded significantly following an October Court of Appeal ruling that deemed undisclosed commission arrangements unlawful. This development has particularly significant implications for the UK automotive sector, where approximately 80 per cent of vehicle purchases involve finance arrangements.\n\nThe Supreme Court hearing, scheduled for early April, will be crucial in determining the industry’s future trajectory. The Treasury’s unusual step to seek involvement underscores the gravity of the situation and its potential impact on Britain’s financial services sector."}