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Watchdog’s Car Finance Scheme Could Short-Change Consumers, MPs Say
APPG warns FCA scheme may shortchange consumers by paying £700 on average versus £1,500 through courts, potentially leaving lenders £7.4 billion in excess profits.
- On last week, the APPG on fair banking concluded the FCA's redress scheme may be influenced by lenders' profit margins, potentially undermining consumer interests, and is not fit for purpose.
- On October 7 the FCA opened a consultation that forecasts about £8.2 billion in redress and offers averages of £700 and £518 for DCA loans, aiming for a quick, no-legal-cost route.
- The APPG's calculations show that court settlements under DCA cases could total roughly £6.5 billion, suggesting higher redress than the FCA plan's estimates.
- The FCA is spending £18 billion on a campaign warning claim adverts could cause people to lose over 30% of their redress, while MPs and peers warned the scheme may impact consumers negatively.
- With the consultation open, Nikhil Rathi said some firms broke rules, and Martin Lewis reassured claimants they can claim without breaching FCA regulations.
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FCA’s Motor Finance Redress Scheme Sparks Industry and Consumer Backlash
The Financial Conduct Authority’s motor finance redress scheme has ignited a firestorm of criticism, with both lenders and consumers finding fault in its proposals. The All-Party Parliamentary Group (APPG) on Fair Banking has accused the regulator of favoring lenders’ profit margins, highlighting a £4.4bn gap in the proposed scheme. Meanwhile, banking giants argue that the scheme goes too far… Source
Coverage Details
Total News Sources48
Leaning Left3Leaning Right1Center37Last UpdatedBias Distribution90% Center
Bias Distribution
- 90% of the sources are Center
90% Center
C 90%
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