The deals relate to car finance deals between 2007 and 2021, where car dealers forced consumers to accept higher rates in their contracts in return for an extra payment from lenders. The City’s UK watchdog, the Financial Conduct Authority, outlawed these deals in 2021.

The FCA opened an investigation into discretionary fee arrangements in January, but granted lenders a delay in responding to customer complaints until December 2025. The pause was to allow for the outcome of legal rulings, including the Court of Appeal ruling on 25 October . .

This ruling does open up potential redress for additional auto finance complaints, however, because it takes a view on all types of fee transactions. The The chief executive of the FCA said the regulator consider a request from creditors to allow them to delay responses to these complaints as well.

Before the ruling, analysts had predicted total payouts from creditors could reach £16 billionalthough this figure may increase further due to the inclusion of additional commission arrangements.

Lloyds Banking Group has already set aside £450m for potential compensation, while Santander has delayed its third-quarter results following the ruling. RBC Capital Markets raised its estimated compensation for Lloyds to £3.2bn, while Santander will pay £1.4bn.

Law firm Courmacs is set to hand more than 20,000 complaints next week for fee contracts not affected by the FCA pause and expects around one million in total, including those subject to adjournment until December 2025, according to its director Darren . Smith.

More car manufacturers temporarily halted sales customers due to the court order and the FCA investigation.