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Sentinel Legal Celebrates Victory for Consumers: Landmark Court of Appeal Ruling in Motor Finance Mis-Selling Case
The Johnson case, the first of its kind to reach the Court of Appeal, revealed how consumers were misled into PCP deals that were misrepresented at the point of sale. Many thought they were securing competitive finance deals, only to discover hidden fees and excessive interest rates. The ruling compels lenders to assume responsibility for these practices and creates a legal precedent expected to influence future motor finance mis-selling cases. The FCA may also adjust its oversight of car finance agreements based on this decision, potentially leading to stronger consumer protections.
, brought the case to the Court of Appeal following an initial defeat. He emphasized the role of the court in exposing unethical practices, noting that lenders often pay secret commissions to car dealers to steer consumers their way or inflate interest rates to boost their own profits.
explained that vague commission references were buried within convoluted paperwork, hiding these behind-the-scenes kickbacks. He likened these secret commission practices to the PPI mis-selling scandal, which also saw hidden profits at consumers' expense.
The FCA is closely monitoring the ruling's impact on similar cases, including Barclays' judicial review on PCP finance mis-selling heard by the High Court on October 15th . This decision is likely to serve as a model for future cases, impacting complaints to the Financial Ombudsman Service and influencing the FCA's redress scheme. According to FCA lawyer Jemima Stratford , the ruling will guide ongoing reviews of motor finance commission arrangements, further pressuring lenders to compensate consumers misled by unfair finance deals.
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