
In yet another twist of financial absurdity, the UK government has gallantly stepped in to rescue beleaguered motor finance fat cats from the horrors of accountability. Heaven forbid the car loan industry might have to—brace yourselves—return stolen money to their rightful owners. Yes, dear reader, our valiant Treasury is ensuring that those poor corporate darlings sleep easy, safe from the spectre of a PPI-style reckoning.
For years, a scandal has been bubbling under the polished bonnet of the motor finance industry. From mis-sold deals to hidden commissions, lenders and their dealer accomplices have been pocketing billions, while unsuspecting motorists unknowingly foot the bill. The Financial Conduct Authority (FCA) finally woke up and banned discretionary commissions in 2021, but complaints have since soared. Borrowers, it seems, have realised they were duped. How inconvenient for the banks.
The FCA’s retrospective inquiry, now delving as far back as 2007, has rattled the industry. And when the Court of Appeal ruled last October that undisclosed commissions were unlawful, lenders panicked. The thought of returning up to £44 billion—the sum analysts predict could be owed—must have felt like a dagger to their wallets. But never fear, the Treasury is here!
In a move dripping with altruistic concern for investors (read: the financial elite), the government is begging the Supreme Court to let it intervene in a case set to define the fallout. The Treasury claims it wants compensation for consumers to be "proportionate to their losses." Translation: let’s cap the payouts so the motor finance sector isn’t "poleaxed." After all, who cares about justice when corporate profits are at stake?
Even more galling is the reaction from the banks. Close Brothers, Lloyds, and Santander are practically popping champagne corks over the Treasury’s intervention. Their share prices surged as analysts cheered this "positive" development. The notion of proportional compensation—rather than full reimbursement—has clearly delighted City analysts, eager to see their beloved institutions avoid another PPI-style battering.
And let’s talk about that PPI scandal, shall we? After years of denying wrongdoing, banks were forced to fork out £50 billion for mis-sold insurance. Did they learn their lesson? Hardly. Now, we’re watching history repeat itself, only this time it’s motorists who are the victims. But don’t expect the government to champion the little guy. Instead, ministers are bending over backwards to reassure investors that Britain is still a safe playground for corporate shenanigans.
Of course, the Treasury’s intervention isn’t just about saving the banks. It’s also a masterclass in narrative control. By stepping in, ministers can spin this as a “balanced” approach—protecting consumers while keeping the wheels of finance turning. Never mind that the so-called "proportionate" redress is a slap in the face for borrowers who were systematically exploited.
The irony is as thick as treacle. The very government that preaches accountability and fairness has chosen to shield an industry that thrives on opacity and greed. Instead of ensuring that lenders pay back every penny of ill-gotten gains, it’s wringing its hands about the "fallout" for motor finance suppliers. Poor fat cats, indeed.
So here we are: another day, another scandal, another bailout for the big players. Meanwhile, motorists are left clutching finance agreements they never fully understood, wondering if they’ll ever see justice. And as the Supreme Court prepares to hear the case in April, one can only hope the judges see through the Treasury’s crocodile tears. Because when it comes to protecting consumers versus protecting corporate profits, we already know whose side this government is on.
Brace yourselves, Britain. The fat cats are back in the driver’s seat.
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