Santander, Lloyds, Barclays customers could be owed £1,100 as 'floodgates open'

James Rodger
·2-min read
Santander, Lloyds, Barclays customers could be owed £1,100 as 'floodgates open'
-Credit: (Image: Reach Publishing Services Limited)


Drivers have been warned the "floodgates" are set to open on car finance payouts in the wake of the finance mis-selling scandal. Motorists and road users who had cars between 2007 and 2021 on car finance could be owed £1,100 payouts, it is estimated.

The UK car finance industry could face an £18billion crisis over commission abuse threatening a "total meltdown in financial services," according to Shore Capital analyst Gary Greenwood. Stephen Haddrill, Director General of the FLA, says "restoring legal and regulatory certainty to this market will require an expedited path to the Supreme Court."

Nate Barber, senior associate at Harcus Parker, said: “We believe banks should pay what is due. No more, no less. What is more concerning is that people are continuing to identify that they have paid over the odds for products which they didn’t need or want.”

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Lenders have seen a surge in complaints about motor finance deals following a judgment from the Court of Appeal that said it was unlawful for car salesmen to receive a commission of any kind from lenders without obtaining the customer’s informed consent.

Martin Lewis, the founder of Money Saving Expert, said “almost everyone who has had car finance deals may have a complaint”.He wrote on X, formerly Twitter: “This potentially more than doubles the number of people involved, and would really start to look more like PPI scale of payouts (and a substantial threat to the car finance industry).”

Alessia Agneto, an analyst at Morningstar, said Santander UK, Lloyds Banking Group and Barclays were “exposed” to the scandal, adding that the car finance sector faced “considerable uncertainty”. The FCA said: “Motor finance firms are likely to receive a high volume of complaints in response to the recent Court of Appeal judgment.

“Any complaint extension would allow them time to consider how these might be efficiently and effectively handled. This would help prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market.”

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