Close Brothers, a major player in the UK car finance industry, has come under increasing scrutiny amid growing concerns over mis-sold car loans. The lender has set aside GBP 165 million to cover potential compensation claims, with legal proceedings ongoing that could impact thousands of customers.
If you believe you have been affected by mis-sold car finance, you may be eligible for compensation. Find out how to claim here.
What Is the Close Brothers Car Finance Scandal?
Close Brothers, one of the UK’s largest car loan providers, is facing legal challenges over its historic commission practices. The Financial Conduct Authority (FCA) launched an industry-wide investigation into car finance in January 2023, focusing on whether lenders misled customers about the cost of their loans.
The case escalated when Close Brothers and MotoNovo lost a key ruling in the Court of Appeal last year. The companies are now appealing to the Supreme Court, with a decision expected in April 2025. Depending on the outcome, the total compensation bill for the industry could reach tens of billions of pounds.
Why Are Customers Complaining?
Many customers were unaware they had been charged undisclosed commission fees, which often resulted in higher interest rates on their car finance agreements. This practice has been deemed unfair and could entitle affected borrowers to compensation.
Key issues include:
• Undisclosed commissions – Many car dealerships and finance brokers received secret commission payments without informing customers.
• Unfairly high interest rates – Some agreements resulted in customers paying more than necessary due to commission-linked pricing.
• Lack of transparency – Many borrowers were not given clear information about how their loan terms were determined.
How Much Compensation Could You Receive?
The exact amount varies, but successful claims could result in:
• A refund of interest payments made on the loan.
• A reduction in the remaining balance of the finance agreement.
• Additional compensation for financial loss or distress.
If you were affected, you could be eligible to reclaim thousands of pounds.
What Is Close Brothers Doing About the Claims?
Close Brothers has already taken significant financial measures to address the growing number of mis-selling claims:
• Set aside GBP 165 million for potential compensation payouts.
• Paused motor finance lending in October 2024 following the Court of Appeal ruling.
• Boosted its capital reserves by GBP 360 million, partly through the sale of its wealth management business.
• Appealed to the Supreme Court to contest the legal ruling on car finance commission practices.
Despite these efforts, investors remain concerned, with Close Brothers’ share price plummeting by 22% following its latest financial update.
Can You Claim for Mis-Sold Car Finance?
If you took out a car finance loan with Close Brothers (or another lender) and were not properly informed about commission fees or unfair interest rates, you may be entitled to compensation.
Eligibility Criteria:
✔ You took out hire purchase (HP), personal contract purchase (PCP), or a similar car finance agreement.
✔ You were not informed about commission payments or how they affected your loan’s interest rate.
✔ Your agreement was with Close Brothers, MotoNovo, Lloyds Banking Group, or another lender under investigation.
To start your mis-sold car finance claim, visit Hutcheon Law and speak to our expert solicitors.
What Happens Next?
With the Supreme Court hearing scheduled for April 2025, the outcome could have significant implications for thousands of car finance customers. If the court rules against Close Brothers and other lenders, billions in compensation may be due to affected borrowers.
If you suspect you were mis-sold a car finance agreement, act now to protect your rights.
Start Your Claim Today
Don’t wait for the final ruling—begin your claim now to secure your compensation. Speak to our specialist team at Hutcheon Law to check if you qualify.
Make your claim now
The mis-sold car finance scandal continues to unfold, with Close Brothers at the centre of mounting legal and financial pressure. If you were affected, you may be owed thousands of pounds in compensation.
To find out more and start your claim, visit Hutcheon Law today.
