Millions of consumers are facing a significant delay to redress payments due to four legal challenges that could result in the collapse of the Motor Finance Redress Scheme, in which car buyers financed with certain companies from 2007 to 2024 hope to be compensated for lost profits from unfair commission arrangements.
Millions of consumers who bought their car on finance are now facing a significant delay to redress payments after the Financial Conduct Authority (FCA) admitted legal challenges put the official free-to-access scheme in doubt.
The FCA admitted there was a scenario where there is "no scheme", with consumers instead having to raise individual complaints, possibly through potentially costly court action. The regulator added that complaints cannot be paused indefinitely. If the compensation scheme, or parts of it, were struck down, it may need to consider a revised approach, which could itself face further legal challenges and delays.
The FCA still insists consumers should receive compensation where they lost out through unfair commission arrangements, and said it remains committed to an industry-wide scheme which it believes would deliver redress "as quickly as possible", although four legal challenges have now been launched against the proposed scheme from three finance companies and one consumer group
Consumer Fraud Scam Motor Finance Redress Scheme Car Finance Unfair Commission Arrangements
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