AM Online: UK lenders face High Court action over overcharging

Three UK motor finance businesses are facing a class action in the High Court over claims customers were overcharged on used car loans between 2015 and 2021.

Black Horse, Santander and MotoNovo Finance, which control over half the UK’s car finance sector, are accused of applying excessive interest totalling nearly £1 billion. Black Horse faces £624m in claims, MotoNovo Finance £209m and Santander UK £166m.

The class action alleges that an anti-competitive network agreement between dealerships and finance providers resulted in customers being charged higher interest rates without their knowledge – benefitting retailers and credit brokers who received higher commission as a result.

Such discretionary commission was banned by the Financial Conduct Authority in 2021.