UK Treasury Intervenes in Supreme Court Car Finance Mis-Selling Case

Chancellor Rachel Reeves seeks to limit potential £30bn compensation bill for lenders, citing economic risks and regulatory uncertainty.

The UK Treasury has requested to intervene in a Supreme Court case concerning car finance mis-selling, which could result in lenders facing up to £30bn in compensation claims.
The case stems from a Court of Appeal ruling that deemed undisclosed commissions on car loans unlawful, leading to widespread market disruption and lender concerns about regulatory clarity.
Chancellor Rachel Reeves argues that the compensation should be proportionate to consumer losses and warns that excessive payouts could harm the UK’s reputation as a business-friendly environment.
Shares in major lenders like Lloyds Banking Group and Close Brothers surged following news of the Treasury's intervention, reflecting relief among investors over potential mitigation of financial exposure.
The Financial Conduct Authority continues to investigate historic car loan practices, with analysts projecting the compensation bill could rival the £50bn cost of the PPI scandal if the Supreme Court upholds the ruling.