The Guardian View on Car Finance Scandal Represse: Loans for the sale of demand, not excuses or rotation | Editorial

WIn the auto financing case, the UK Supreme Court sent a clear message: Some car drivers purchased deals that were already unfair, but they are not the task of judiciary to re -draw the boundaries of the Consumer Protection Law. Judges suggested this burden, and settles with the organizers and elected governments. This logic is in line with a large speech in June by the President of the Court, Lord Reed, who Argue The judges are not politicians – nor should it be. He led a seat, however, discovered injustice in the case of the factory supervisor, Marcus Johnson. The court put the flag, the threshold determined – but it stopped imposing itself.

Now, the stick has been passed. Millions can obtain payments if the Financial Conduct Authority (FCA) follows the court ruling with the proposed recession plan, now for consultation. The organizer admits what the courts and activists have proposed for a long time: that the hidden committees and the non -deadly contracts were settler, and that consumers have been widespread. It may be 2025, but the roots of this scandal span back contracts. More than 90 % of new car purchases are funded, and for years, buyers have not provided the best deal – only those that gained the largest broker.

Last October, the Court of Appeal witnessed the hidden commissions as a bribe – secret incentives to pay the basic loans. The banks were on a hook for 40 billion pounds in compensation, and this view prevailed. But the Supreme Court did not agree. He said that merchants are not worms. They are not priests or doctors. They are sales representatives and everyone knows this. The Treasury, and failed, tried to intervene on behalf of banks that fear large batches. The Supreme Court rejected this petition briefly. Rachel Reeves may argue that she was guarding financial stability, but it is not a good view of separation with the mortgaged consumers, especially when there is a strong situation indicating that the organizers were asleep on the wheel.

FCA now admits that many companies have broke the rules. He plans for a compensation plan that covers loans that date back 2007Including both the estimated committee arrangements and some of them. Possible bill? At least 9 billion pounds, and perhaps weakened. Most individuals may get less than 950 pounds as compensation. The court’s refusal was not to extend the law to include confidence cases as ignoring; It was a sign. The law allows the treatment of injustice. But the heavy state must take place by the state.

this episode It puts naked narrow deeper. The British credit system often works on deviant incentives and asymmetric information. The mediators are offered as consultants, but they work as a sales that are driven by commission. In the case of Mr. Johnson A. 1650 pounds sterling The hidden committee has not been revealed – a quarter of the car price -. This is not Quirk. It is classic for the economy Lemon problem. In car financing, consumers did not know how much brokers were wandering or how that deal was closed. Without confidence or clarity, quality suffers – and everyone flourishes with “lemon”.

For the Center for Appeal of Minds; The failure to interpret the law strongly in the face of clear violations is in itself a judicial choice. The Supreme Court re -directed the narration intelligently. The organizer moves. Minister Consumer compensation system must now be supported and not City protection One of the consequences of its wrong sales. The audience will monitor.