Lloyds Bank is assessing the impact of a recent court decision requiring greater transparency in fees earned on car loans, according to a report in Financial News.
The judgment requires dealers to disclose to customers the fees they receive from lenders such as Lloyds and Close Brothers, potentially making it illegal for dealers to collect these fees without the customer’s consent. There is sex.
Following the Court of Appeal’s decision, Lloyds’ share price fell sharply, reflecting market concerns about potential debt. The ruling raised the bar for disclosure standards in this area and raised concerns that customers could seek compensation for undisclosed fees related to past car financing agreements.
The issue has emerged as part of a wider regulatory investigation into potential misselling in the industry, with companies such as Lloyds and Close Brothers already drawing up large reserves to cover potential liability claims. Assigned.
In response, Lloyds noted that its previous approach to fee disclosure was in accordance with regulatory guidance, but admitted the judgment was “beyond the scope” of the current Financial Conduct Authority (FCA) review. The bank also noted that the companies involved in the case plan to appeal to the UK Supreme Court.
The case centers on discretionary fee arrangements that allow brokers and auto dealers to increase interest rates on financing contracts in order to earn higher commissions. This leads to customers overpaying. Regulators banned the practice in 2021 after identifying the economic impact on consumers.
Lloyds shares continued to fall on Monday, falling a further 1.2% in early trade.
‘Lloyds Bank reviews impact of Motor Finance Commission ruling’ was originally produced and published by Motor Finance Online, a brand owned by GlobalData.
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