Posted By Global Banking and Finance Review
Posted on January 21, 2025
(Reuters) - British finance minister Rachel Reeves launched a bid to protect car-loan providers from multibillion-pound payouts in a landmark mis-selling case, with the Treasury taking the unusual step of seeking permission to intervene in the Supreme Court, the Financial Times reported on Monday.
The Treasury stated that the case has the "potential to cause considerable economic harm and could impact the availability and cost of motor finance for consumers", the FT quoted a Treasury submission to the Supreme Court as saying. It warned the case could damage Britain's reputation as a place to do business, the report said.
The Treasury did not immediately respond to a Reuters request for comment.
The Financial Conduct Authority said in November it would press the Supreme Court to expedite a decision to permit lenders to appeal a crucial judgment that may pave the way for Britain's costliest consumer banking scandal since the faulty sales of payment protection insurance.
That judgment ruled it was unlawful for car dealers to receive a commission from banks providing motor finance, without obtaining the customer's informed consent.
The UK arm of Spain's Banco Santander had set aside 295 million pounds ($363.50 million) to cover possible costs related to the ongoing regulatory review into charging by car finance lenders.
Lloyds has also set aside a 450 million pound provision to cover possible redress linked to the review.
($1 = 0.8116 pounds)
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by Muralikumar Anantharaman)
