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Santander has become the latest finance house to set millions of pounds to pay for motor finance commission payments to consumers.
The company has put aside £295m to cove the issue although it said the figure could be lower or higher and the whole issue was shot through with uncertainty.
The Santander move followed the judgement on 25 October by the Court of Appeal that motor dealers acting as credit brokers owe certain duties to their customers.
The Court 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
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 £295m figure, cited in its delayed Q3 results, include estimates for operational and legal costs and potential awards, based on various scenarios using a range of assumptions.
“There are currently 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,” it said.
The outcome of the FCA’s Review may be informed by the judgment of the Court of Appeal handed down on 25 October 2024 in relation to cases against other lenders involving DCAs (noting that the lenders subject to the Court of Appeal’s judgment have indicated they intend to seek permission to appeal), and the outcome of a judicial review of a final decision by the Financial Ombudsman Service (FOS) against another lender that was heard in October 2024.