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Lloyds warns motor finance scandal could cost it nearly £2bn as bill rises

about 15 hours ago
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Lloyds Bank has put aside an extra £800m to deal with possible compensation claims over the motor finance scandal, with its total provision rising to almost £2bn.The bank, one of the most exposed to an ongoing scandal in which drivers were overcharged for loans as a result of commission paid to car dealers, had previously set aside £1.15bn to deal with potential costs.However, it said on Monday that an additional charge of £800m reflected an increased likelihood of further historical cases, particularly those affected by discretionary commission arrangements (known as DCAs), being eligible for compensation.The new estimate comes after the Financial Conduct Authority (FCA) published a 360-page consultation paper for its redress scheme.

The regulator said last week the mis-selling scandal would cost banks £11bn overall, though it could rise to £12,4bn if all victims applied and secured payouts as part of the scheme,Payouts are expected to average £700 on an estimated 14m unfair deals,Lloyds said the ultimate outcome may “evolve in response to representations made by various parties as well as further legal proceedings and complaints or any other broader implications of the supreme court judgment,“However, the total £1.

95bn provision, including both redress and operational costs, represents the group’s best estimate of the potential impact of the motor finance issue.”Lloyds shares rose by 1% early Monday morning.The Financing and Leasing Association, which represents car lenders, has warned for months that a multibillion-pound bill could disrupt the car finance market.This could lead to some providers offering fewer or more expensive loans, while others could go bust, it said.Last week, Hyundai Capital UK revealed it had put aside £34.

5m for the motor finance issue for 2024, according to its latest Companies House filings.The UK division of Honda Finance Europe said it had ringfenced £62.2m for compensation.Both figures were released before the FCA announced the proposed scale of the compensation scheme, and therefore could be higher.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe financial arm of BMW has put aside £200m.

Executives at the company have sought to hold talks with the chancellor, Rachel Reeves, about the consumer compensation scheme.Other lenders, including Santander UK, Barclays and Close Brothers are expected to shoulder most of the costs.Banks are forecast to account for 51% of the payouts, with captive lenders shouldering 47% and independent lenders about 2%, the FCA has estimated.The car finance debacle is one of the biggest financial scandals since payment protection insurance (PPI) mis-selling, where 34 million consumers received an average of about £1,000 each.The dispute over car finance has weighed on the sector in recent months, with Lloyds chief executive Charlie Nunn saying last year that the case was feeding into the UK’s “investability problem”.

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‘Death to Spotify’: the DIY movement to get artists and fans to quit the music app

This month, indie musicians in Oakland, California, gathered for a series of talks called Death to Spotify, where attenders explored “what it means to decentralize music discovery, production and listening from capitalist economies”.The events, held at Bathers library, featured speakers from indie station KEXP, labels Cherub Dream Records and Dandy Boy Records, and DJ collectives No Bias and Amor Digital. What began as a small run of talks quickly sold out and drew international interest. People as far away as Barcelona and Bengaluru emailed the organizers asking how to host similar events.The talks come as the global movement against Spotify edges into the mainstream

1 day ago
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Meta AI adviser spreads disinformation about shootings, vaccines and trans people

A prominent anti-DEI campaigner appointed by Meta in August as an adviser on AI bias has spent the weeks since his appointment spreading disinformation about shootings, transgender people, vaccines, crime, and protests.Robby Starbuck, 36, of Nashville, was appointed in August as an adviser by Meta – owner of Facebook, Instagram, WhatsApp, and other tech platforms – in an August lawsuit settlement.Since his appointment, Starbuck has baselessly claimed that individual shooters in the US were motivated by leftist ideology, described faith-based protest groups as communists, and without evidence tied Democratic lawmakers to murders.Starbuck’s online posts have not changed in tenor since the “anti-DEI agitator” was brought into the Meta fold, and his Trump administration connections raise broader questions about the extent to which corporate America has capitulated to the Maga movement.The Guardian repeatedly contacted Meta for comment on Starbuck’s role, and his rhetoric online, but received no response

1 day ago
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Using a swearword in your Google search can stop the AI answer. But should you?

Using a swearword in your Google search can stop that annoying AI overview from popping up. Some apps let you switch off their artificial intelligence.You can choose not to use ChatGPT, to avoid AI-enabled software, to refuse to talk to a chatbot. You can ignore Donald Trump posting deepfakes, and dodge anything with Tilly the AI actor in it.But should you? And can you avoid AI altogether?As the use of AI spreads, so do concerns about its dangers, and resistance to its ubiquitousness

3 days ago
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Peter Thiel’s off-the-record antichrist lectures reveal more about him than Armageddon

Peter Thiel famously isn’t into academia. And yet, in four recent off-the-record lectures on the antichrist in San Francisco, the billionaire venture capitalist has made a good case for credentialing.In these meandering talks, Thiel is clearly aiming for the kind of syncretic thinking he so relished in the books and lectures of the philosopher and professor René Girard, whom he knew at Stanford University and whose work he has long admired. Unfortunately, more often than not, Thiel ends up with something that reads like Dan Brown.Thiel has previously workshopped his talks on Armageddon at Oxford and Harvard, at various theology departments, and with a few unfortunate podcasters

3 days ago
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‘Little lungs are paying’: 1.6m claimants head to high court as carmakers finally face punishment for Dieselgate

Carmakers accused of cheating air pollution rules have faced little punishment in UK but trial brought by 1.6m motorists is about to begin“Little lungs are still paying for Dieselgate every day,” says Jemima Hartshorn, the founder of the Mums for Lungs campaign group. Her own young daughter has suffered serious breathing problems, which at their worst involved the harrowing experience of having to pin her to the floor to administer an inhaler.It is 10 years since the scandal erupted, exposing cars that pumped out far more toxic fumes on the road than when passing regulatory tests in the lab. But Dieselgate is far from over

3 days ago
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Google given special status by watchdog that could force it to change UK search

Google faces enforced changes to its UK search business after the competition watchdog conferred a special status on the company that puts it under tighter regulation.The Competition and Market Authority (CMA) confirmed that Google has “strategic market status” (SMS) in search and search advertising, a term that means the company has such market power that it requires a special regulatory regime.The watchdog now has the power under new digital laws to order changes to how Google operates in those areas. Friday’s announcement is the first time it has designated a tech firm with SMS.It has already flagged a number of potential changes including giving internet users an option to choose a different search service via “choice screens”

3 days ago
foodSee all
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‘It’s really good for the staff’: how restaurants adapt to customers drinking less

3 days ago
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Helen Goh’s recipe for pumpkin cheesecake with maple pecan brittle | The sweet spot

4 days ago
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Melbourne bar ranked best in Australasia and 19 in world

4 days ago
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Why bag-in-box wines are here to stay | Hannah Crosbie on drinks

4 days ago
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Rachel Roddy’s recipe for red peppers stuffed with orzo, tuna, capers and herbs | A kitchen in Rome

5 days ago
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Strong flat white for Batman: should I use a ‘coffee name’?

5 days ago