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£829 Average Payouts at Risk as Legal Row Delays Car Finance Compensation Scheme
The watchdog says four legal challenges could push payouts for 12.1 million agreements to 2027 and add costs to the £9.1 billion scheme.
- On Tuesday, Financial Conduct Authority deputy chief executive Sarah Pritchard told the Treasury Select Committee that legal challenges against the redress scheme mean compensation payments for mis-sold car finance will likely be delayed until at least 2027.
- Designed to address 'hidden' discretionary commission arrangements , the scheme aims to compensate motorists in an estimated 12.1 million agreements where lenders increased interest rates to earn higher payments.
- Volkswagen, Mercedes-Benz, and Credit Agricole are among the firms challenging the scheme, arguing the rules are unlawful while the FCA has already spent more than £20 million developing the programme.
- FCA chief executive Nikhil Rathi warned the scheme could be 'struck down in whole or part,' which might force the regulator to revert to a complaints-led process adding £6 billion in costs and three years.
- Amid the delays, the regulator is exploring 'options for consumers who wish to receive money now,' as Pritchard noted that consumers have waited a long time and 'need to be compensated.
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22 Articles
The Northern Echo+8 Reposted by 8 other sources
£829 average payouts at risk as legal row delays car finance compensation scheme
Drivers expecting compensation over hidden car finance commissions may now have to wait until 2027, as legal challenges delay the FCA's redress…
·County Durham, United Kingdom
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Coverage Details
Total News Sources22
Leaning Left3Leaning Right1Center13Last UpdatedBias Distribution76% Center
Bias Distribution
- 76% of the sources are Center
76% Center
L 18%
C 76%
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