- Lenders under pressure
- Dealerships in the frame too
Anyone who still answers the phone with trepidation after years of callers asking if they have been mis-sold payment protection insurance (PPI) will know how long regulatory scandals can linger. The financial watchdog started to investigate PPI roughly two decades ago, but the crackdown has cast a long shadow – and has cost banks roughly £50bn in compensation.
It is not surprising, therefore, that investors are nervous about a Court of Appeal decision last month that clamps down on commission paid by lenders to car dealerships. Analysts have rapidly been downgrading company forecasts on the back of the judgment, and valuations in the motor finance industry have taken a battering.