UK's FCA considering redress scheme for motor finance claims

30th Jul 2024 07:27

(Sharecast News) - The UK's financial watchdog said it was considering a compensation scheme for motor finance customers who complained about commission payments but was extending a deadline for companies to respond.

"Firms involved in the review have engaged with us constructively, but many have struggled to supply the data we need within the requested time," the Financial Conduct Authority said.

Difficulties included firms not keeping older data, and data being stored on multiple systems or being spread between lenders and brokers.

"Our next steps could involve consulting on a redress scheme. This is why we intend to take the precautionary step of pausing complaint handling until 4 December 2025, as it may take until then to confirm how firms would implement it," it added.

'It is too early to say if we will intervene in this way, but based on our work so far, it is more likely than when we started our review. We consider allowing for this possibility preferable to the uncertainty and greater burden for firms created by a shorter pause that may be subsequently extended."

Reporting by Frank Prenesti for Sharecast.com