Laura WilesFurther to a statement expressing its disappointment over certain responses to its motor finance redress scheme earlier this week, the FCA has published details of its approach to the proposed challenges.
The regulator has reiterated that in creating the final scheme, it made changes to reflect feedback from both consumer groups and lenders, such that the outcome is fair to consumers while being proportionate for firms. The FCA also praises the majority of lenders who have supported the scheme – including those which have ultimately decided not to challenge the scheme – highlighting their pragmatic approach towards the judgments made by the FCA in order to implement a scheme of this scale promptly.
However, the FCA has received four legal challenges so far: one from Consumer Voice, and the others from lenders Volkswagen Financial Services, Mercedes Benz Financial Services and Credit Agricole Auto Finance.
The FCA respects the rights of any party that the Courts determine has standing to challenge the scheme, but notes that it will defend the scheme robustly as lawful and the best solution for resolving the widespread, long-running and complex issue.
The regulator is engaging with lenders and consumer groups to understand views and determine next steps for the scheme, and expects to provide further advice to firms in the course of next week.