UK court says:- that car dealers must explicitly disclose the commissions they receive from finance lenders.
31/10/2024
The UK Court of Appeal recently ruled significantly regarding commission disclosure in the motor finance sector.
The court found that brokers, such as car dealers, must explicitly disclose to their customers the commissions they receive from finance lenders.
Key points from the ruling include:
- Transparency: Brokers must now clearly inform customers about the commission they receive and how it is calculated.
- Consumer Protection: The decision ensures that consumers are fully aware of potential conflicts of interest when entering finance agreements.
- Industry Impact: Major lenders like Close Brothers, MotoNovo, and Honda Finance Europe have temporarily halted new finance deals to comply with the new requirements. This has caused significant disruption in the market, with fears of a slowdown in car sales.
This ruling is expected to increase consumer trust and confidence in the motor finance sector by making the process more transparent. However, it also poses challenges for lenders and brokers as they adapt to the new legal standards.
Source:
- Landmark Court of Appeal ruling on car finance was 'very unexpected .... https://cardealermagazine.co.uk/publish/landmark-court-of-appeal-ruling-on-car-finance-was-very-unexpected-but-welcome/309398.
- Lloyds weighs options after shock motor finance court ruling. https://www.thisismoney.co.uk/money/markets/article-14010281/Lloyds-weighs-options-shock-motor-finance-court-ruling.html.
- UK car finance industry faces significant disruption as lenders halt deals .... https://bmmagazine.co.uk/news/uk-car-finance-industry-faces-major-disruption-as-lenders-halt-deals-over-commission-ruling/.
- Dealers forced to reveal commission earned on car finance deals. https://www.autoexpress.co.uk/consumer-news/364820/court-decision-car-finance-commission-threatens-huge-compensation-bills.
- The Court of Appeal ruling opens the door to motor finance claims. https://www.financial-news.co.uk/court-of-appeal-ruling-opens-door-to-motor-finance-claims/.
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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.