Santander takes major step ahead of £1,100 compensation payouts for customers

Santander has put aside £295 MILLION for car loan mis-selling. Santander UK has put aside £295m to cover potential payouts to car loan customers as the bank issued its first estimate of the financial fallout from the growing car loan mis-selling scandal.

The figures were released alongside the bank’s third-quarter results, which were delayed last month after a court of appeal ruling said it was unlawful for two lenders to have paid a “secret” commission to car dealers without borrowers’ knowledge.

BBC and ITV star Martin Lewis and Money Saving Expert have speculated the payouts could be £1,100. In the results on Wednesday, the company said: “Increased income from active price management, and a steadily improving economic environment were offset by a provision relating to historical motor finance commission payments.”

READ MORE: Drivers wake up to £113 fine for using someone else's unpaid fuel

READ MORE: McDonald's rolls out change to all UK restaurants and it'll last 'six weeks'

READ MORE UK set for new snow bomb which will 'explode' this weekend with 9 inches dumped

Santander bosses at the bank this week said there are "significant uncertainties as to the nature, extent and timing of any remediation action if required and the ultimate financial impact could be materially higher or lower than the amount provided."

The high street bank Santander UK said last month it disagrees with the conclusions reached by the Court of Appeal in its October ruling. Bosses say the ruling "set a higher bar for the disclosure of and consent to the existence, nature, and amount of commission paid to dealers than that required by current FCA rules, or regulatory requirements in force at the time of the cases in question."

And the bank went on, saying: "The lenders involved in the cases subject to the Court of Appeal’s judgment have indicated that they intend to seek permission to appeal that judgment to the Supreme Court." The money it has put aside means that almost £1bn has now been assigned to handling the crisis, following hefty allocations from the likes of Lloyds Banking Group and BMW.