Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Barclays faces blow over car finance mis-selling as court upholds ombudsman ruling

by December 18, 2024
December 18, 2024
Barclays faces blow over car finance mis-selling as court upholds ombudsman ruling

Barclays has lost a pivotal legal challenge that strengthens the position of car finance customers seeking compensation for mis-sold loans.

In a ruling with far-reaching implications for UK lenders, the High Court rejected the bank’s judicial review of a Financial Ombudsman Service (FOS) decision, potentially opening the floodgates to billions of pounds in claims.

At the heart of the case was a £1,327 compensation order issued to Barclays in January, stemming from a complaint by Jenna Lewis. In 2018, Lewis purchased a second-hand Audi for £19,133, financed partly by a £13,333 Barclays loan arranged through car dealer Arnold Clark. Lewis later argued that she had not been properly informed of the commission arrangement: the dealer had unfairly increased the interest rate to boost its own commission—an arrangement she alleged was never clearly disclosed.

The ombudsman’s finding, mirrored in a similar case against Lloyds, contributed to the Financial Conduct Authority (FCA) launching a broader investigation into historical mis-selling across the sector. Discretionary commission models, under which dealers benefited by charging customers higher rates, were banned at the end of 2020. Before the ban, 14.6 million car loans were written under such agreements, involving £8.1 billion in bank-paid commissions.

Barclays, although not seeking to overturn Lewis’s individual compensation, pursued a judicial review to clarify legal interpretations of the underlying consumer credit rules. Mr Justice Kerr dismissed the bank’s challenge “on all grounds,” a verdict that rattled share prices across the industry. Barclays shares fell 1.3%, while Lloyds Banking Group and Close Brothers—also implicated in the broader mis-selling scandal—saw similar declines.

A Barclays spokesman expressed disappointment and confirmed plans to appeal the decision. The FCA’s ongoing investigation will be critical to determining just how extensively lenders might be exposed. RBC Capital Markets estimates that resulting compensation could run as high as £6 billion.

Market observers say much hinges on legal battles still to come. In October, the Court of Appeal ruled that any undisclosed commission, not just discretionary arrangements, could be unfair to consumers. If the UK Supreme Court upholds that ruling next year, the liability for banks could soar beyond even today’s daunting projections.

For now, the Barclays loss provides clarity on one point: as regulators and courts continue to scrutinise car finance agreements, major lenders face a mounting challenge in containing the financial and reputational costs of past sales practices.

Read more:
Barclays faces blow over car finance mis-selling as court upholds ombudsman ruling

0
FacebookTwitterGoogle +Pinterest
previous post
UK inflation rises to 2.6% as interest rate decision looms
next post
Congress Should Reject a Blockbuster Christmas Stopgap Measure

You may also like

House Prices Rise for Second Month in a...

April 3, 2024

Housing crisis leaves 21 hopeful tenants battling for...

September 13, 2024

House sales peak in July but buyers are...

August 26, 2022

Dementia debit card Sibstar wins £125k Dragons Den...

March 5, 2024

Amazon Sued for £2.7bn by UK Third-Party Sellers...

June 28, 2024

Over 90% of mid-sized businesses struggling to access...

June 26, 2023

Charity shops go digital to compete with booming...

April 21, 2025

Boris Johnson promises £700m for Sizewell C nuclear...

September 1, 2022

The business of betting: How UK bookmakers turn...

May 29, 2024

Kevin O’leary joins billionaire’s bid to buy TikTok...

January 8, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Disabling Trump’s “Tariff Button”

      June 5, 2025
    • ‘Sick puppy’ Tim Walz should never have been on Dems’ 2024 ticket, Trump says

      June 5, 2025
    • Federal judge orders Trump to restore funding to Clinton-era agency gutted by DOGE

      June 5, 2025
    • Musk says Trump would have lost 2024 election without him as ‘Big Beautiful Bill’ feud continues

      June 5, 2025
    • Ex-Biden adviser calls Jean-Pierre ‘kinda dumb,’ deletes tweet, says she’s not a ‘genius-level Black woman’

      June 5, 2025
    • ‘Coming for us’: Expert sounds alarm on CCP’s mission to ‘kill Americans’ after FBI makes shocking arrests

      June 5, 2025

    Categories

    • Business (8,148)
    • Investing (2,010)
    • Politics (15,535)
    • Stocks (3,128)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved