In 2021, the Financial Conduct Authority (FCA) banned deals in which the dealer received a commission from the lender, based on the interest rate charged to the customer. This was upheld in the Court of Appeal based on the fact the commissions were not disclosed, but why should they be?
Car insurers are faced with very large, multi-million pound costs, if customers claim compensation on that basis. But Rachel Reeves, Chancellor, may intervene to protect the insurance industry.
It is surely daft that customers who bought insurance with their eyes wide open should be able to claim anything. They presumably were happy with the costs and level of cover, so the fact there were undisclosed commissions is irrelevant.
This is yet another example of the courts inventing new principles and undermining contract law. It also another example of the incompetence of the FCA.
See BBC Report here: https://www.bbc.co.uk/news/articles/cre8qr91w75o
Roger Lawson (Twitter: https://x.com/RogerWLawson )
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