Lloyds Banking Group faces the possibility of additional charges related to the car finance mis-selling scandal, as the UK’s FCA warns that total costs to banks could reach £8.2bn. The issue arises from opaque commissions incentivizing higher interest rates on millions of vehicle sales. Lloyds, which operates Black Horse, had initially set aside £1.2bn for compensation but now suggests a larger provision may be needed. Close Brothers is also expected to increase its provision. The proposed redress scheme, if approved, would cover 14 million motor finance agreements from 2007 to 2024, with an average compensation of £700 per agreement.

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