Barclays PLC (LSE:BARC) has seen the High Court reject its appeal over a decision by the Financial Ombudsman related to a car finance loan.
The bank said it intends to appeal the decision which ruled it unfairly added £1,300 commission to a car loan arranged in 2018.
“This challenge related to a single, specific case on which we disagreed with the Financial Ombudsman Service’s decision,” Barclays said. “We are disappointed in the court’s ruling and will be appealing.”
Car finance has become a huge headache for UK banks with Lloyds and Close Bros facing potentially huge bills following a ruling by the Court of Appeal over whether commission payments should have been disclosed to borrowers.
Shares in Barclays fell by 0.8% while Lloyds dropped 1.1% and Close Bros 1.6% even though those two banks were not directly involved in today's ruling.
The Financial Conduct Authority welcomed the High Court's decision against Barclays.
"The judge found that the Financial Ombudsman had interpreted our rules and the Consumer Credit Act 1974 correctly when deciding that the lender and car dealer involved in this case did not meet the relevant standards in place at the time," said the regulator.