The Finance & Leasing Association (FLA) has confirmed that banks and finance hoses will not be challenging the Financial Conduct Authority’s (FCA) motor finance redress scheme.
It said it continued to have concerns about the scheme but it wanted a practical solution which compensated consumers for mis-selling while giving motor finance houses the wider market clarity on the issue.
Shanika Amarasekara, chief executive of the FLA, said: ““We have always been clear that customers who have suffered loss should receive compensation and that a consumer redress scheme is the right way to achieve this.
“The FLA has undertaken a detailed review of the FCA’s proposed scheme in close consultation with our members, alongside internal and external economists and legal counsel.
“As the leading industry trade body, it is our responsibility to consider how regulatory action will affect not only our members and their customers, but also the wider UK lending market, particularly when the scheme is unprecedented in scale and scope, and the impact on the UK economy will be significant.
“We continue to have concerns about aspects of the scheme, but our priority is that a practical solution be reached that ensures timely compensation for consumers while giving the motor finance industry and the wider market clarity and finality on this issue. For those reasons, we will not be challenging the FCA’s current scheme.
“We will continue to engage constructively with the FCA and other stakeholders to support the effective implementation of the scheme.”
