The financial industry in Britain could face costs of up to £30 billion ($38 billion) as a result of a probe into historic motor finance sales practices, according to ratings agency Moody’s.
The investigation targets banks and specialist lenders involved in car purchase financing and focuses on alleged 'hidden' commissions.
A recent court decision, which upheld appeals from claimants, has broadened the scope of the review. This development is expected to escalate potential liabilities for lenders.
The Financial Conduct Authority (FCA) is currently conducting the review, with Moody’s estimating redress costs ranging between £8 billion and £21 billion. However, the court ruling could add an additional £9 billion in liabilities, pushing the total to £30 billion under Moody's "worst-case" scenario. Photo by GJMarshy, Wikimedia commons.