The Financial Conduct Authority (FCA) has defended its industry-wide motor finance redress scheme against challenges thrown down by Mercedes-Benz, Volkswagen, Consumer Voice and Crédit Agricole Auto Finance.
It said the scheme was the fastest, simplest route for consumers and the most efficient way for firms to put things right and give certainty to their investors. Alternative approaches would be “slower and much more costly” for firms, it added.
“We engaged widely in designing the scheme. While being clear not everyone would get everything they would like, we made changes to reflect feedback from both consumer groups and lenders. The final scheme is fair to consumers and proportionate for firms.
“We welcome the broad support for the scheme and the commitment from most lenders to implement it.”
The FCA said most finance houses, represented by the Finance & Leasing Association (FLA), had said they would not challenge the scheme.
“They have taken a pragmatic approach, recognising that introducing a scheme on this scale promptly has required us to make judgements to simplify in a reasonable and lawful way some complex legal and operational issues.
“We recognise that for some lenders this has been a difficult decision. We appreciate that they have ultimately decided to put a resolution for their customers first, many of whom have been waiting for more than two years for an answer. They have also chosen to provide certainty for investors and to help rebuild trust in the market.
“We respect the right of any party that the Courts decide has standing to challenge the scheme.
“We also note that none of the claims received are expressly in the name of individual consumers.
“We will defend the scheme robustly as lawful and the best way to resolve such a widespread, long running and complex issue.”
