FCA Suggests All-Inclusive Motor Finance Redress Scheme

With claims management firms moving away from PPI and to non-dislosed/discretionary commission arrangements (DCA) paid to motor dealers when selling cars on finance, the Financial Conduct Authority is now considering an industry-wide all inclusive review and redress scheme.

The reality is that car finance was pushed heavily when cars were sold and possibly to the financial destriment of the consumer is paying higher than expected finance repayments.

As part of its review, the FCA wants to ensure a consistent, uniform approach to dealing with complaints and compensation calculation.

Comment

A recent Court of Appeal ruling has suggested there is liability across the whole industry and it would appear the FCA agrees that “consumers are compensation in an orderly, consistent and efficient way”, which would likely mean that all car financing firms will be required to review every single car finance deal over a specific period to identify those affected and pay compensation/financial redress in a prescribed format.

The FCA will wait though as there is currently an appeal against the Court of Appeal’s ruling being heard at the Supreme Court with a ruling due on 1^st April.  The FCA will likely act after this.