Unews World
Concerns have been raised over whether consumers or firms will still have the paperwork that may be needed for a motor finance redress scheme.
Stephen Haddrill, director general of the Finance and Leasing Association (FLA) said: “We have concerns about whether it is possible to have a fair redress scheme that goes back to 2007 when firms have not been required to hold such dated information, and the evidence base will be patchy at best.
“We will be interested to see how the FCA (Financial Conduct Authority) addresses this point in its consultation.”
On Sunday, the FCA said it will consult on an industry-wide compensation scheme.
The regulator said many motor finance firms were not complying with rules or the law by not providing customers with relevant information about commission paid by lenders to the car dealers who sold the loans.
The FCA said it will propose rules on how lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much. It estimates that most people will probably receive less than £950 in compensation.
The consultation will launch by early October and if the compensation scheme goes ahead, the first payments should be made in 2026, the regulator has said.
Speaking on BBC Breakfast, Nikhil Rathi, chief executive of the FCA said: “We’re going to have to work through those issues in the consultation where one or the other party doesn’t have all the details.
“That is one of the challenges here.”
Mr Rathi told the BBC: “My message to the industry is – work with us, help us find solutions to some of these issues and don’t try and haggle on every single point. If we want to get this up and running, get trust back into this market, let’s get moving now and sort this out in the consultation.”
The Financial Ombudsman Service (FOS) can already look at complaints going back to 2007.
The FCA has said that people who have already complained do not need to do anything.
Consumers who are concerned that they were not told about commission and think they may have paid too much for their motor finance lender should complain now, it has said.
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The regulator has said that people do not need to use a claims management company or law firm and doing so could cost them around 30% of any compensation paid.
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