News

Government's Attempt to Intervene in Car Finance Mis-Selling Blocked by Supreme Court

May 2025

Efforts by the UK government to intervene in the ongoing car finance mis-selling scandal have been halted following a Supreme Court decision. Chancellor Rachel Reeves had sought to support consumers affected by controversial commission practices in the motor finance industry.

Background

Between 2007 and 2021, many car finance agreements included discretionary commission arrangements (DCAs), allowing brokers to set interest rates and earn higher commissions without transparent disclosure to customers. This practice led to consumers potentially overpaying on their car loans.

Government's Attempt to Intervene

In response to growing concerns, Chancellor Reeves attempted to have the government join legal proceedings related to the mis-selling allegations. The aim was to advocate for consumer interests and ensure fair outcomes in the legal process.

Consumers who believe they may have been affected by DCAs in their car finance agreements should stay informed about developments in this case. It's advisable to review any car finance agreements from the period in question and consider seeking independent financial advice if necessary.

Supreme Court Decision

The Supreme Court has ruled against the government's intervention, stating that it would not be appropriate for the government to participate in the ongoing legal proceedings. This decision limits the government's ability to directly influence the outcome of the case.

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Implications for Consumers

While the government's direct involvement has been curtailed, the Financial Conduct Authority (FCA) continues to assess the situation. The FCA may still propose an industry-wide redress scheme, depending on the outcomes of the legal proceedings and further consultations.