Latest news with #CompensationBill
Daily Mail
6 days ago
- Automotive
- Daily Mail
Car finance shares soar after mis-selling ruling - but analysts warn of compensation shortfall
Motor finance lenders and their investors breathed a 'small sigh of relief' on Monday morning after a landmark Supreme Court ruling left them facing a much smaller compensation bill than initially feared. On Friday, the Supreme Court delivered a blow to car buyers after it sided with major lenders in the car finance scandal. Had the decision gone the other way, it could have led to £44billion of payouts dubbed 'PPI on wheels'. However, the Financial Conduct Authority announced it will consult on an industry-wide redress scheme that could begin paying out from next year. While the latest estimates are below forecasts as high as £40billion prior to the ruling, analysts have warned cash set aside by lenders so far falls well short of their potential liabilities. And the market's biggest lenders – Lloyds, Barclays and Close Brothers – look set to shoulder the largest burden. The Financial Conduct Authority said on Monday it would consult with the motor finance industry over a redress scheme for motorists claiming to have been overcharged, estimating the total bill could hit between £9billion and £18billion. Analysts at RBC have estimated the cost to come in at £11.5billion. But that would leave the sector facing an enormous shortfall, having set aside a combined total of just £2billion for compensation, according to Shore Capital Markets. FTSE 100 Lloyds shares jumped 5.9 per cent to 80.22p in early trading, while Close Brothers - over which the scandal has weighed most heavily - soared 23 per cent to 489.4p. Barclays, which has relatively little exposure to the scandal, was up 1.7 per cent at 362.6p. Among smaller London-listed rivals Secure Trust Bank was up 19 per cent to 1,160p, while Vanquis Banking Group was up 5.4 per cent and Paragon Banking Group was up 2.2 per cent. Setting out the parameters of its consultation on potential compensation, the FCA said it wants to ensure any redress scheme would be 'fair to consumers who have lost out' but 'ensure the integrity of the motor finance market, so it works well for future consumers'. This means the cumulative size of redress cannot be allowed to break the market. The regulator is expected to detail its proposed consultation by early October, ahead of a six-week consultation period before a redress scheme is finalised. Payments to customers are therefore likely to begin next year, with the FCA indicating most individuals will receive less than £950 in compensation – compared to typical payments of £1,000 to £2,000 after the PPI scandal. Shore Capital research analyst Gary Greenwood wrote in a note on Monday: 'The Supreme Court's judgement will allow the motor finance industry and its investors to breathe a partial sigh of relief, given the worst-case scenario is off the table.' He said some smaller lenders should be relatively insulated as they have 'limited exposure to motor dealers, have historically focused on relatively simple commission agreements…and have correctly followed regulatory guidelines on commission disclosure'. However, Lloyds, Barclays and Close Brothers could face a much heavier burden. Greenwood said: 'The larger lenders with more complicated commission agreements… and/or those that have failed to follow the regulatory rules on disclosure, may still be exposed to sizeable remediation costs, albeit to a much lesser extent than if all three judgements had been upheld. '[Lloyds, Close Brothers and Barclays] may still need to set aside further provisions, albeit to a lesser extent than would have been the case if the Supreme Court had upheld all three of the Court of Appeal's judgements. 'However, what is unclear to us is what proportion of the industry liability may ultimately rest outside of the UK banking industry and with the finance arms of the major motor manufacturers, who presumably represent a large part of the motor finance industry but have to date set aside very little by way of provision. 'Could it be that they will be responsible for picking up the largest part of the industry provisioning shortfall?' Lloyds told investors on Monday it would keep its £1.2billion provision for motor finance claims under review. It said: 'The ultimate impact on the Group will be determined by a number of factors still to be resolved, in particular the outcome of the FCA consultation and any further interventions as well as any broader implications of the judgment, including legal proceedings and complaints. 'After initial assessment of the Supreme Court judgment, and pending resolution of the outstanding uncertainties, in particular the FCA redress scheme, the group currently believes that if there is any change to the provision it is unlikely to be material in the context of the group.' Close Brothers, which had previously set aside £165million, also provided no update to its provision and said it looked forward to engaging with the FCA on its consultation. Barclays, which set aside £90million for redress in its financial results for 2024, has yet to comment. Stephen Haddrill, director general of the Finance & Leasing Association, said in a statement: 'We have concerns about whether it is possible to have a fair redress scheme that goes back to 2007 when firms have not been required to hold such dated information, and the evidence base will be patchy at best.
The Sun
16-07-2025
- Politics
- The Sun
Afghan scandal is the latest evidence public are lied to and ignored by governments… It's time for an election NOW
IT came out of a clear blue sky. When John Healey, the Secretary of State for Defence, got up in the House of Commons on Monday afternoon you could have heard a pin drop. When he sat down the country's collective jaw had hit the floor. 4 4 A Royal Marine had circulated an email in 2022 containing the personal details of 25,000 Afghans by mistake. The email revealed which of them had helped British troops during the war — and would be an immediate gift to the Taliban if they got their hands on it. They would surely hunt these collaborators down and kill them. But, believe it or not, the story gets worse from there. Because the last Conservative government decided to cover it up and, using a draconian legal manoeuvre, attempted to keep it secret forever. Thankfully, because of dogged determination from newspapers and other media outlets, the truth has come out. And it's as shocking as it is shameful. Thousands upon thousands of Afghan families have been coming into this country secretly on unmarked planes, flying into military and commercial airports. At the moment, we don't know exactly how many of them there are, how many of them are going to stay here for life. And we don't even know really how much it's all going to cost in the long run. Defence chiefs braced for £1BILLION compensation bill over Afghan data leak scandal What we do know is that it's likely to be in excess of 24,000 people and £7billion. The Tory government went to extreme lengths to obtain a super-injunction in 2023 — usually reserved for millionaire footballers and celebrities to protect their private lives from scrutiny — so that we would never find out what they were doing. Lies and subterfuge Rishi Sunak, Michael Gove, Suella Braverman, Grant Shapps and Robert Jenrick all knew what was happening. And none of them thought it was a good idea for the British public to be given a clue about it. People were rightly angry on Talk on Tuesday and more frustrated with their politicians than ever. Many said they believed this was the final straw after years of being ignored, ridiculed and abused over their views on immigration. We were inundated with calls from all over the country. Listeners and viewers told me they'd had enough of lies, of subterfuge, of misleading reports and of betrayal by this government and the last. What they want now is an election. To clear the air once and for all and to take power back for the people of his country. When he was Prime Minister, Rishi Sunak vowed to stop the boats and thereby put an end to illegal migration. But it now turns out that not only did that not happen, he actively conspired to conceal from the public his own government's policy to import thousands of Afghans and their families secretly, offering them free housing and settled asylum status. When Keir Starmer took over at No10 last July, he decided to continue keeping secret the enormous scandal while pretending he was getting to grips with immigration. At Prime Minister's Questions yesterday he attempted to portray the horrific abuse of freedom of the Press as simply the failings of the previous government. 4 4 But, in truth, Labour must also shoulder much of the blame for attempting to pull the wool over the eyes of every man, woman and child in Britain by preventing the publication of one of the biggest government blunders in our history. For the past three years, I have been telling the story of our immigration overload, of groups of young men gathering in town centres up and down the country, seemingly jobless and in ever increasing numbers. My knowledge of the problem was informed by ordinary people telling me what it was like where they lived every single day. Yesterday was no different. One caller from Sussex told us how he'd bought a new build, four-bedroom house for half a million pounds only to discover that an Afghan family had been moved into another one for free on the estate, along with three others in smaller homes. 'We weren't told,' he said. 'It leaves a very sour taste.' Another woman from Uxbridge said she was living in former Air Force housing when suddenly, in February last year, several Afghan families were moved into other homes in the same compound. All the children were sent off to the local schools, and none of them spoke English. People have told me for months that there seems to be more Afghan nationals around the place than usual. They're worried. They know from recent government statistics that Afghan and Eritrean men are 20 times more likely to commit sex crimes than British men. And they also see the unfairness of paying out £7billion for years and years to come, to provide free homes, schooling and support. Let us face facts. What we've got is a government that's in power but not in charge. It's a government that was elected last July somewhat on false pretences. Because we were not told about the Afghan kill list, nor the fact it was leaked, nor that the establishment was conspiring to keep it all secret from the public. It's clear that we have all been lied to, treated with contempt and ignored. The people have had enough. Let the public decide. And let the public choose who they want to run this country. It's time for an election NOW.
