The recent Court of Appeal ruling, which declared hidden commissions paid by banks to car salesmen as illegal, signals a potential wave of claims akin to the PPI fiasco.
Mr. Nunn warned that the court's decision disrupts investor confidence in the UK economy, saying it 'bleeds across the whole economy,' causing hesitation from both domestic and foreign investors.
Preliminary estimates indicate that the fallout from the car finance crisis could lead to compensation costs between £16 billion and £40 billion across the industry.
The situation, described by some as a repeat of the PPI scandal, has already led Lloyds Bank to set aside £450 million in anticipation of compensation claims.
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