A MAJOR bank is looking to ditch its scandal hit car finance arm from its core UK operation.
The decision follows a , which deemed it unlawful for car dealers, acting as brokers, to receive commissions from lenders without obtaining the customer's consent.
Santander has already to compensate affected borrowers.
This comes amid ongoing speculation that the bank may be considering a complete withdrawal from the UK market.
Despite the rumours, Ana BotÃn, chief executive of Santander Group, stated in February that the .
However, City analysts suggest that shedding its car finance division could enhance the appeal of its core banking operations to potential buyers.
As reported by Bloomberg, the plan would involve moving the finance division out of its Santander UK Plc subsidiary.
Benjamin Toms, of RBC Capital , told The Telegraph: “Shifting of the consumer finance business out of the UK subsidiary could be an important step in this sale process.
“Given the ongoing litigation in the motor finance space, removing this product from the equation, will likely help with the marketability of the Santander UK asset.”
The bank's ongoing plans come as the Supreme prepares to rule on whether lenders should be held responsible for compensating drivers.
Should the ruling go against lenders, the total compensation bill is projected to reach £38billion, impacting numerous banks and specialist finance providers.
In March, the Financial Conduct Authority (FCA) confirmed it had been granted permission to intervene in the case and had submitted its arguments to the Court.
Should the Court rule that motor finance customers have suffered losses as a result of widespread failings by firms, the FCA is expected to consult on the introduction of an industry-wide compensation scheme.
Under a redress scheme, firms would need to figure out if their mistakes caused customers to lose .
If they did, the firms would have to pay the right amount of compensation.
The FCA would create rules for firms to follow and make sure they stick to them.
This scheme would make things easier for customers compared to making a formal complaint.
It would likely mean fewer people using claims management companies, so they'd get to keep all of the compensation they're owed.
PROGRESS OF FCA INVESTIGATION
The FCA had initially planned to publish the results of its in September, but this has now been .
Additionally, firms now have until December 4, 2025, to respond to customer complaints.
The FCA says it has had to push back the deadline due to it taking “longer than expected to get the data” it needed from implicated car finance firms.
Investigators have also been unable to complete their review because of a pending court case surrounding one of the complaints.
It's worth nothing, the FCA's decision to extend the deadline to December 4 next year is just when firms have to respond to any complaints.
Customers are still encouraged to file their complaints before this date, and in some cases, there are specific time limits for doing so.
You can find more information about any time limits the regulator sets by visiting fca.org.uk/consumers/car-finance-complaints.
HOW TO CLAIM
Consumer finance website offers an email template to help you complain to your finance provider.
You can download this by visiting moneysavingexpert.com/reclaim/reclaim-car-finance.
Alternatively, you can complain directly without using the template.
It's crucial for anyone who took out car finance to file a claim, even if a previous claim was denied.
In your complaint, ask whether you were overcharged due to your broker receiving a commission and request the company to rectify this if it occurred.
If you're unsatisfied with the company's response, you can escalate your complaint to theat no cost.
You have until July 29, 2026, or up to 15 months from the date of the company's final response letter, whichever is longer.
Avoid using a claims management firm, as they will take a portion of any successful claim.
