Lloyds Bank has allocated £450 million to cover potential costs arising from an investigation into car finance deals conducted by the UK’s financial regulator, the Financial Conduct Authority (FCA). This development comes as part of the bank’s announcement of a substantial rise in annual profits, with pre-tax earnings soaring to £7.5 billion last year, exceeding expectations and marking a 57% increase from the previous year.

The FCA initiated a probe last month to examine whether individuals had been overcharged for car loans, focusing on the commissions earned by brokers who arranged car financing. Lloyds, being one of the major banks, is perceived as particularly exposed to potential claims due to its ownership of Black Horse, one of the UK’s largest motor finance providers.

The investigation revolves around discretionary commission arrangements where lenders allowed car dealers to adjust interest rates on loans, leading to higher commissions for brokers. The FCA banned these arrangements in 2021, estimating that the move would collectively save drivers £165 million annually. The regulator’s recent announcement of the investigation has prompted around 10,000 people to file complaints, with potentially more waiting in the wings.

Lloyds’ decision to set aside £450 million reflects the bank’s acknowledgment of potential compensation claims. Chief Financial Officer has stated that this situation differs from prior remediations, downplaying comparisons to the payment protection insurance (PPI) mis-selling scandal that cost banks tens of billions of pounds.

The exact extent of any misconduct or customer loss remains unclear, prompting the FCA’s involvement to provide clarity for both customers and the industry. Lloyds also disclosed another ongoing investigation by the FCA, examining the group’s compliance with money-laundering rules and regulations. The bank asserts full compliance but is uncertain about the potential impact on its finances.

Who Can Claim for Car Finance Mis-Selling?

Concerns surrounding car finance mis-selling have prompted the Financial Conduct Authority (FCA) to launch a thorough review of complaint handling procedures, triggered by worries that motor finance firms might be unfairly rejecting claims from borrowers who believed their contracts incurred additional expenses due to hefty dealer commissions. 

Despite the ban on such practices in 2021, the Financial Ombudsman Service (FOS) received over 10,000 complaints alleging overcharging, leading the FCA to investigate further. This development has the potential to result in a compensation payout similar to the Payment Protection Insurance (PPI) scandal. 

Individuals affected by this issue are encouraged to promptly lodge complaints to potentially claim compensation, especially those who purchased cars or vans on motor finance before 2021. The FCA’s investigation will specifically focus on complaints related to cars bought with motor finance before 28th January 2021, using personal contract purchase (PCP) or hire purchase agreements, where the lender and car dealer had a ‘discretionary commission arrangement’ linking interest rates to broker commissions. 

However, the investigation will not cover complaints involving cars purchased with finance on or after 28th January 2021, car leasing arrangements (Personal Contract Hire), or mis-selling claims unrelated to commission but concerning issues like affordability checks.

If you are unsure whether you will be eligible to make a claim for car finance mis-selling, please do not hesitate to contact us.

We have such a wonderful team at Johnson Law Group, who all work tirelessly to provide a first-class service to our clients. And with our team growing by the day, we wanted to take the time to introduce them! 

Anastasis Michailas is a Paralegal at JLG, who joined us in September 2023.

Educational Background

Bachelor of Laws – University of Reading

Legal Practice Course with LLM – The University of Law

Previous jobs

Trainee Lawyer at Harris Kyriakides LLC Cyprus (Licensed Lawyer in Cyprus Bar Association since July 2023)

What does your job at JLG entail?

Assisting the emissions team

• Working on excel reports.
• Update client on their emissions claims (calls, emails)
• Research on case law

What’s your favourite part of the job?  

My favourite part of the job is the fact that we are working as a team, helping each other on the tasks that we have. We are never left on our own and in this way, we are learning much faster, and we are more efficient in our results.

What do you think the future holds for mass litigation in the UK?

I think that mass litigation in the UK will grow even more in the future because of the way these diesel emissions claims are currently moving forward. The courts showed a lot of positivity in that regard, and I believe more and more similar claims will appear.

Favourite Pastimes

Playing basketball, Tennis and working out

Favourite Manchester restaurant

Maki n Ramen city centre

Interesting fact about you

I actually love to cook while watching Masterchef.

Roku is the latest company to confirm it has been the victim of a cyberattack, with over 576k accounts breached.

The streaming platform, which has a UK office in Manchester, shared that this new incident was uncovered while investigating an earlier breach, which had impacted 15k accounts.

Roku said that this is “a small fraction” of its 80m active accounts but has implemented a range of controls and countermeasures to detect and deter future credential stuffing incidents.

It has also reset the passwords for all affected accounts and is notifying those customers.

If you have ever been the victim of a data breach, here’s what to do:

1. You should receive confirmation of this from the company that suffered the attack. Read the information carefully to understand how you may have been affected.
2. Find out what data the company has about you and what specific information was involved in the data breach. This will help you determine what steps you need to take to protect yourself. If you don’t know, you have the right to request access to this, which you can do by writing to the company and making a subject access request. 
3. Depending on the information that has been breached, it may be a good idea to change your passwords. Use strong, unique passwords for each account and consider utilising a password manager to keep them secure.
4. Keep any eye on your bank accounts and notify your bank if you see any unusual activity.
5. If you have been a victim of fraud, you are more likely to be a target of “fraud recovery fraud”. This is where fraudsters impersonate a lawyer or a law enforcement officer telling you that they can help you to recover money lost from fraud. They could contact you via email, phone or letter, often out of the blue. Be very cautious of people who contact you about this and report any concerns to the reporting centre. 
6. Depending on the nature and severity of the data breach, you can complain to the company through their official complaints procedure or through a regulatory body such as the ICO. You may also be able to make a compensation claim if you have suffered losses or stress.

The Financial Conduct Authority (FCA) has undertaken a comprehensive review of later-life mortgage firms, collaborating with major players to enhance their advice processes. This initiative aims to address concerns surrounding the potential vulnerability of customers in complex financial situations, particularly those seeking equity release through later-life mortgages.

What Are Later Life Mortgages?

A later-life mortgage is a specialised financial product designed to cater to the needs of homeowners aged 55 or over (or 50 for the Payment Term Lifetime Mortgage). This mortgage option enables individuals to borrow money against the value of their homes while retaining the right to continue living in their residences. 

The two primary types of later-life mortgages offered are Lifetime Mortgages and Retirement Interest Only Mortgages. With these tailored solutions, homeowners can access funds tied up in their properties, providing financial flexibility and support during their later years. The flexibility of these mortgages allows individuals to meet specific financial needs while maintaining the security and comfort of their own homes.

Later-life mortgages, are the most popular form of equity release. Given the intricate nature of these financial products, which often target individuals facing higher risks in vulnerable circumstances, it becomes imperative to ensure that consumers receive accurate information and suitable advice.

FCA Investigation

The FCA’s review focused on firms responsible for approximately half of all lifetime mortgage sales. Unfortunately, the findings revealed that in many instances, the advice provided did not meet the expected standards. Key issues included a lack of evidence demonstrating adequate consideration of individual circumstances and a failure to discuss alternative options with clients.

To address these shortcomings, the FCA has required the firms falling short to enhance the quality of their advice. This initiative is geared towards fostering personalised advice that takes into account the unique circumstances of each customer. Moreover, the majority of firms under review have modified their advisor incentive structures to align with the FCA’s drive for improvements.

Customers who believe they have received poor advice now have avenues for complaint. They can approach the respective firm with their grievances, and if dissatisfied with the response, they have the option to escalate the matter to the Financial Ombudsman Service. This process ensures that consumers have a channel for seeking redress if they feel they were inadequately informed about their later-life mortgage.

In light of the FCA’s review, all lifetime mortgage advisors must scrutinise the findings and take immediate action where necessary. By doing so, they contribute to the overarching goal of elevating industry standards, ensuring transparency, and providing fair and informed financial advice to those considering equity release.

Uber Technologies, Inc. and Uber B.V. have recently found themselves in hot water as the Dutch Data Protection Authority (AP) imposed a substantial fine of €10 million in response to privacy violations. Uber has been penalised for failing to disclose comprehensive details about its data retention practices concerning European drivers and for hindering drivers’ rights to privacy.

One of the primary reasons behind the hefty fine is Uber’s failure to transparently communicate the full scope of its data retention periods for European drivers and the countries outside of Europe with which it shares this data. The AP found that the company’s lack of clarity put drivers at a disadvantage, as they were unable to fully comprehend how their personal data was being handled.

The Dutch Data Protection Authority discovered that Uber had created unnecessary hurdles for drivers attempting to exercise their right to privacy. The app designed for drivers included a form for requesting access to personal data, but the inconspicuous placement within the app and complexity across various menus made it challenging for drivers to navigate. Additionally, Uber’s handling of access requests by placing information in an unclear file further obstructed drivers from understanding and interpreting their personal data.

Uber’s privacy terms and conditions also came under scrutiny for lacking specifics regarding the duration of data retention for drivers and the security measures in place when transferring this information to non-European Economic Area (EEA) countries. The absence of crucial details in the terms and conditions further compromised drivers’ ability to make informed decisions about their privacy.

The fine was prompted by over 170 French drivers who complained to the French human rights organisation Ligue des droits de l’Homme et du citoyen (LDH). LDH subsequently submitted a complaint to the French data protection authority, which, due to Uber’s European headquarters being in the Netherlands, was forwarded to the Dutch Data Protection Authority. In determining the amount of the fine, the DPA considered the organisation’s size and the severity of the infringements. At the time of the violations, approximately 120,000 drivers were working for Uber in Europe.

Uber has objected to the DPA’s decision and lodged a notice of objection. However, the DPA noted that Uber has taken corrective measures to address the infringements. This case highlights the impact of global complaints on multinational corporations and the role of data protection authorities in holding companies accountable for privacy breaches.

The General Data Protection Regulation (GDPR) empowers individuals to claim compensation from organisations for breaches of data protection law. The GDPR grants individuals the right to claim compensation for both “material damage” (e.g. financial losses) and “non-material damage” (e.g. distress) resulting from a breach of data protection law. The Information Commissioner’s Office (ICO) which is the UK privacy watchdog can’t award compensation, but individuals have the right to pursue it independently.

While court proceedings are not mandatory for obtaining compensation, organisations may agree to pay without legal intervention. However, if a resolution is not reached amicably, the next step involves making a claim in court. Seeking independent legal advice before proceeding is highly recommended to assess the strength of your case.

What Happens When You Take a Data Breach Claim to Court?

Before initiating court proceedings, individuals must demonstrate that they have attempted to settle the claim. This involves communication with the responsible organisation to explore potential agreements. 

If an agreement still can’t be reached, individuals can apply to a court to enforce their data protection rights and, if seeking compensation, can pursue this as a standalone claim or combine it with an action to enforce their rights. 

The compensation awarded in a successful data breach claim is at the discretion of the judge presiding over the case. Factors considered include the severity of the breach and its impact on the claimant, particularly in terms of the distress suffered. The court’s decision will be influenced by a comprehensive evaluation of all circumstances.

In case an organisation refuses or is unable to pay the awarded compensation, individuals have the option to seek guidance from the court on enforcing the judgment. It’s essential to be aware that the court may also consider awarding costs, either in favour of or against the claimant, depending on specific circumstances. Seeking independent legal advice remains crucial to understanding the potential risks associated with initiating a data breach claim.

Claiming Compensation for a Data Protection Breach

The aftermath of a data protection breach can leave individuals grappling with distress and potential harm such as financial or reputational. The amount of compensation awarded in a successful data breach claim is at the discretion of the judge overseeing the case. The judge considers all circumstances, focusing on the severity of the breach and its impact on the claimant. Assessing the distress suffered is a pivotal element in this evaluation, reflecting the emotional toll on the individual.

For a valid claim under the UK GDPR, it is crucial that the breach involves the exposure of personal data and that the claimant suffered harm as a direct result. The potential compensation for such breaches varies based on the type and duration of the harm experienced. For example, a diagnosis of anxiety disorder resulting from the breach could lead to compensation ranging from £3,950 up to £110,000, depending on the duration of symptoms.

To substantiate a valid claim, claimants must provide evidence demonstrating that the breach occurred due to the failings of the data controller and/or processor, resulting in psychological or financial harm. For psychological injuries, medical notes or reports from therapists can serve as evidence. In cases of financial loss, providing documents such as invoices, receipts, bank notification letters, and bank statements strengthens the claim.

Last week, the High Court outlined a timetable in the emissions scandal group action, and decided to add cases involving Peugeot, Citroen, Renault and Nissan vehicles as lead actions, along with Mercedes-Benz and Ford.

This will ensure that these manufacturers will be the first to have to explain their actions to the Court and have their engineering evidence scrutinized by experts appointed by the Claimants Group.

In addition, the Court has set “hard and realistic” court deadlines for the legal issues to be tried in these claims.

The first trial window will take place in October 2024 with the actions likely to conclude by 2026.

The messaging from the Court to all defendant manufacturers in the diesel emissions group actions is clear: it will not tolerate defendant manufacturers trying to hide behind court procedure and taking unnecessary technical points to try and delay the ultimate outcome of these cases involving millions of claimant car users.

To that end, the Court has expressed itself in no uncertain terms that these cases will be actively case managed to ensure court deadlines are complied with and adjournments or delays will be avoided.

The Court’s timetable provides the parties with a clear roadmap to conclusion. The timetable will see whether:

• the German Motor Regulator’s decisions are compatible and binding in English Courts;
• whether there was an existence of ‘defeat devices’ in the vehicles and whether any device broke the law; and
• whether any breach led to a loss for Claimants and how to compensate for that loss.

This is good news for all claimants looking to hold the motor industry to account for falsely claiming their vehicles met Euro emissions standards.

In May 2022, Volkswagen Group settled 91,000 emissions claims out of court for £193m after a five-year dispute. With Volkswagen Group being the largest car manufacturer in the world, this settlement indicates that other manufacturers should be prepared to resolve Claimants’ claims promptly, and certainly a considerable time before the timetable concludes in 2026.

Johnson Law Group Managing Director, Jamie Patton, says, “We are delighted that the High Court is taking proactive steps to case manage this huge litigation, which we are confident will lead to securing compensation for our clients much sooner than the heel dragging manufacturers would have hoped for. Judgement is coming!”

Manufacturers are likely to be reluctant to pay any sum, though it will be clear to them that creating further delays is no longer an option for them.

We have such a wonderful team at Johnson Law Group, who all work tirelessly to provide a first-class service to our clients. And with our team growing by the day, we wanted to take the time to introduce them! 

Sadaf Khan is an Associate Solicitor at JLG, who joined us in July 2023.

Educational Background: I completed an LLB undergraduate degree followed by completing my Post graduation LPC at BPP Manchester.  I qualified as a Solicitor in 2016.

Previous jobs:  I have been working within the legal profession since 2009.  

What does your job at JLG entail?

I am responsible for day-to-day conduct of several diesel emissions group actions in the UK.

What’s your favourite part of the job? Thinking outside the box to overcome issues that arise from the changing landscape of the English legal system and holding large corporations to account for the environmental damage their failures/deceit has caused.

What do you think the future holds for mass litigation in the UK? 

I anticipate a rise in the prevalence of group class actions. As instances of high-volume cases become more prevalent, the courts will need to adjust to facilitate group litigation, this would be the only efficient way to seek justice through the courts.

Favourite Pastimes/Personal Life:

– I love spending time with my family and loved ones. It could be just talking or doing some activities together. 

– I am a keen gardener – I have transformed my  back garden into a vegetable and fruit garden.

– I am an avid reader – I successfully completed a 52-book challenge in 2022 and have joined a similar challenge for 2024.

– I find cooking and baking very relaxing and can usually be found looking up new cake recipes to try.

– As well as reading I am a writer, in the lockdown I self-published a quiz book for the South Asian community and since then I have been working on my first novel.  It has recently completed its second draft and I am starting the process of getting an editor on board for this.

– I enjoy travelling and experiencing new places and cultures.  I have visited 5 continents already and I am hoping to get the other two under my belt too!

Interesting fact about you:

– My favourite animal is an elephant closely followed by an owl.

– My favourite food is cheese.

Favourite Manchester restaurant: Nur Malaysia based on 177 Wilmslow Road, Manchester M14 5AP.  The most amazing Malaysian food you will find in Manchester!

For businesses that engaged an energy broker without clear disclosure of commission terms, there may be grounds for legal action. Energy brokers are considered agents and are expected to act in the best interests of their clients. 

Failure to do so may give rise to claims for the entire commission amount plus interest. Noteworthy claims, such as Windermere School’s £200,000 case, highlight the significance of scrutinising past dealings with energy brokers and for brokers to disclose and be transparent about any commissions they receive.

Energy brokers, often seen as allies in reducing businesses’ energy bills, have faced scrutiny for their deceptive practices, particularly in masking commissions. 

The energy broker process begins with brokers forging relationships with energy companies, and establishing exclusive agreements or preferential treatments. When engaging businesses, brokers position themselves as trusted advisors, carefully recommending contracts that yield personal financial incentives for the broker. 

Crucially, these commissions are secretively woven into the contract, leaving businesses unaware as they continue to shoulder hidden costs month after month.

Businesses may face a hidden financial drain when customers sign contracts without knowing that brokers earn commissions. These commissions, received from energy companies, are quietly included in overall contract prices, going unnoticed by unsuspecting businesses. This highlights the importance of being vigilant when dealing with energy brokers. It emphasises the need for transparent contracts and a clear understanding of the broker-provider relationship to protect businesses from unknown financial burdens.

Energy brokers, often referred to as third-party introducers (TPIs), play a pivotal role in assisting businesses, including schools and charities. However, a lack of regulation in the business energy market has given rise to questionable practices, particularly concerning hidden commissions. 

Unlike their counterparts in the consumer energy market, energy brokers operating in the business market face a notable absence of regulatory oversight. This regulatory gap has allowed concerning practices to emerge, prompting Ofgem, the gas and electricity regulator, to launch an investigation into TPIs’ business practices in 2021.

Ofgem’s investigation revealed a lack of transparency among many TPIs regarding the commissions they receive. Customers may not be informed about these commissions, and in some cases, TPIs claim their services are free. Alternatively, commission details may be buried in the small print or vaguely mentioned without providing substantial information.

Ofgem’s findings indicated that a significant number of businesses using TPIs are unaware of the commercial relationships between these brokers and energy suppliers. This lack of awareness may lead businesses to believe that TPIs are acting in their best interests, unaware that TPIs may direct them to suppliers offering higher commission rates. In some instances, TPIs may influence businesses to enter less favourable energy contracts, prioritising higher commissions over client benefits.

The diesel emissions scandal, commonly known as ‘Dieselgate,’ first emerged in 2015 when Audi and Volkswagen, both part of the VW Group, faced regulatory action in the United States. What started as a controversy surrounding a specific group of diesel cars has since expanded, to include various vehicle manufacturers. 

The Background

Dieselgate began after it was found that Audi and Volkswagen used illegal ‘defeat devices’ in their diesel vehicles. These devices were allegedly designed to manipulate emissions tests conducted by regulators, ensuring that the vehicles met the required standards for approval and sale. The scandal, however, didn’t remain confined to the VW Group, as it soon implicated other manufacturers.

The main point of the group legal claims is that the cars and vans, not just those from VW Group, are said to create more harmful nitrogen oxide (NOx) pollution than what was advertised. Law firms representing consumers argue that this constitutes a case of mis-selling, as buyers were not informed of the alleged emissions flaws.

Consumers involved in these claims may be entitled to compensation for various reasons.

Namely, if buyers had known about the alleged emissions flaws, they might not have purchased the vehicle. Consumers may have paid a premium for what they believed to be more environmentally friendly cars, whether buying new or second-hand.

If vehicles required fixes to comply with emissions standards, the implemented solutions might have led to reduced fuel efficiency or performance issues. This, in turn, could lower the value of the vehicle or result in additional costs, for which consumers may seek damages.

The Claims

People have already been paid compensation for diesel claims. Group cases are ongoing. 

The High Court has set a trial date for the Mercedes group case in February 2025, with a formal cut-off date for new claimants set on 22nd February 2024. 

While individual law firms have set earlier deadlines, there may still be opportunities for new Mercedes claims with some firms. Missing this deadline might mean losing the opportunity to bring your claim and potentially missing out on compensation.

Claims against other car manufacturers, including BMW, Ford, Kia, and Mazda, are progressing following hearings in December 2023 and January 2024. The court’s efforts to simplify claim management, reduce costs, and ensure efficient resource use resulted in Ford joining Mercedes’ trial date in February 2025. Further details about potential additions to this trial are expected in the upcoming hearing.

A notable development in the diesel emissions saga involves Audi, Seat, Skoda, and VW, which settled out of court in May 2022 for £193 million. This settlement, following the High Court’s ruling in April 2020 regarding the use of a ‘defeat device,’ marked a significant chapter in the legal action. While the details of individual claimant compensation remain confidential, the settlement concluded the original claim.

The diesel emissions claims continue to unfold, impacting various car manufacturers. Individuals affected by the emissions scandal should stay informed about key deadlines and developments. Whether you’re a current claimant or considering joining a new claim, understanding the latest updates is essential for navigating the complexities of diesel emissions claims.