The Supreme Court has now concluded a major hearing that could change the future of mis-sold car finance in the UK – and potentially unlock over £30 billion in compensation for consumers who were affected by hidden commissions and unfair car loan practices.
From 1st to 3rd April 2025, the court heard appeals in a pivotal case involving hidden commissions and systemic overcharging by lenders and brokers. The judgment, which will be handed down at a later date, will set a defining precedent for consumer finance regulation, and determine how consumers are protected.
Background of the Case
The hearing stems from a group of three cases – Hopcraft v Close Brothers, and Wrench and Johnson v FirstRand Bank (MotoNovo), that were previously decided in the Court of Appeal in October 2024.
The Court of Appeal ruled that brokers cannot legally receive commission payments from lenders without the customer’s fully informed consent. This decision was challenged by lenders Close Brothers and MotoNovo, who took the matter to the Supreme Court.
The key question is whether consumers were aware brokers were receiving commission, and how much, before signing their car finance agreements. Many were unaware that brokers had financial incentives to push more expensive deals, often resulting in significantly higher monthly payments.
Bott and Co Leading the Fight for Justice
Bott and Co has been instrumental in bringing this issue to light. We represented clients in the original Ombudsman decisions that prompted the Financial Conduct Authority (FCA) to launch its own investigation into hidden commissions in January 2024.
We’ve been helping clients challenge these unfair practices for years. This case is about more than compensation, it’s about restoring trust in a system that was stacked against ordinary people.
Coby continues: We’re currently representing hundreds of thousands of claimants, many of whom were significantly overcharged without knowing.
A Personal Story: Francisco’s 4.5 – Year Fight
One such client is Francisco Esteves, from Surrey, who was shocked to discover he’d been mis-sold a high-interest loan despite having a strong credit rating. He was charged £3,762.73 in commission, nearly 46% of the loan amount, all without his knowledge.
“My broker took advantage of my ability to borrow at a higher interest rate just to earn more commission for themselves,” he said. “Without Bott and Co, it would have been impossible to fight back.”
After years of frustration with lenders and delays at the Financial Ombudsman Service, Francisco finally feels hopeful that justice is on the horizon.
Inside the Industry: Whistleblowers Speak Out
Back in 2021, Bott and Co uncovered disturbing evidence from whistleblowers inside a Manchester-based finance broker. Two former employees revealed that staff were encouraged to inflate interest rates to maximise commissions, even when customers qualified for better deals.
One compliance manager reportedly raised concerns, warning that the practice was “basically illegal,” but the firm carried on profiting regardless.
These revelations highlight the widespread nature of the misconduct, with potentially millions of agreements affected across the UK.
What Happens Now?
Although the Supreme Court judgment has not yet been delivered, a ruling is expected in the coming months. A win for consumers could pave the way for billions in compensation, setting a precedent that holds lenders accountable for their role in promoting unethical deals.
Even if the court sides with the lenders, consumers may still have other routes to compensation, including individual claims and action through the FCA. The most important step is to act now.
Take Action – Submit Your Claim Today
If you took out a car finance agreement, even years ago, you could be owed thousands of pounds in compensation. But with potential claim deadlines approaching, it’s vital not to delay and avoid missing out!
Use Bott and Co’s Mis-sold car finance claim checker to check your eligibility and see how much you could claim.