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Bradford Bank Will Not Challenge Plan for Car Finance Reclaims Scheme
The scheme covers 12.1 million mis-sold car finance deals and could deliver about £7.5 billion in redress, the FCA said.
- The Financial Conduct Authority's £9.1 billion motor finance compensation scheme is proceeding after the Finance and Leasing Association and major lenders decided against pursuing a legal challenge.
- Regulators stopped discretionary commission arrangements in 2021, which previously allowed brokers to increase interest rates on car loans to boost their own commission, sparking the need for redress.
- Payouts are due on about 12.1 million mis-sold deals, with the FCA estimating an average payment of £829 each to eligible customers who took out agreements since April 6, 2007.
- Major lenders including Santander, Barclays, and Lloyds accepted the plan to provide certainty, despite disagreeing strongly with aspects requiring redress for non-demonstrable harm.
- Consumer Voice is preparing a separate legal challenge, arguing the scheme could leave millions out of pocket, while the FCA expects the vast majority of claims settled by 2027.
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The Finance & Leasing Association (FLA), the main professional body in the financial sector, has turned a blind eye by refusing to challenge the reparation plan in court, which would cost the lenders 9,1 billion pounds.
Motor finance lenders in 'gridlock' as £9bn scandal clogs rearview
The UK’s top banks are gearing up to put the long-running motor finance scandal in the rearview mirror but warning lights on the dashboard suggest they may still face “gridlock” on the multi-billion pound saga. FTSE 250 lender Vanquis became the latest on Monday to confirm it would not lodge a legal challenge against the regulator’s industry redress scheme. The bank is on the hook for £3m in provisions. Lloyds Banking Group – which owns the UK’s…
·London, United Kingdom
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Total News Sources15
Leaning Left1Leaning Right0Center4Last UpdatedBias Distribution80% Center
Bias Distribution
- 80% of the sources are Center
80% Center
L 20%
C 80%
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