FCA to launch motor finance consultation in October
The Financial Conduct Authority has confirmed it will consult industry in October about a compensation scheme for motor finance customers.
Dealers and finance companies faced a bill estimated to be around £40bn for hidden commissions.
The Supreme Court ruled in their favour earlier this month, but the FCA is now proposing a compensation scheme for drivers who may have been unfairly treated, with payouts of up to £950.
As part of a pre-consultation engagement with industry, it has hosted a roundtable with key stakeholders to provide an overview of the key areas under consideration for the scheme’s scope and design.
Points discussed included why the scheme is being taken back as far as 2007, access to data and the challenges of historic record retention, the impact of dealer acquisitions on data availability, the role and availability of disclosure documents, clarification of liabilities between brokers and lenders, and how new car finance agreements, with different rates and structures, will be treated.
Industry-wide scheme
Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA), said: “The Financial Conduct Authority (FCA) has now confirmed it intends to consult in early October for six weeks, on an industry-wide scheme to compensate customers who may have been treated unfairly.
“NFDA will continue to engage closely with the FCA on behalf of members to ensure the dealer perspective is fully represented in the design of the scheme.”
