Probe: The FCA will spend nine months investigating whether commissions paid to brokers before 2021 were unreasonably high
The City regulator is investigating vehicle loan firms – and its probe could result in millions of motorists receiving compensation for being overcharged.
The Financial Conduct Authority (FCA) will look at whether commissions paid to brokers before 2021 were unreasonable.
Experts say it could lead to billions of pounds in payouts if there is wrongdoing. About 10,000 people have complained to the Financial Ombudsman Service, the financial arbiter, claiming they were overcharged on motor loans.
The complaints relate to commission arrangements made on loans taken out before 2021 between lenders and dealers.
These commissions were used by brokers to set high interest rates for borrowers, netting them a larger commission at the expense of the customers.
The FCA banned the practice in 2021 but complaints about it have since soared.
Money-saving expert Martin Lewis has said overcharged customers could receive thousands of pounds compensation.
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