Secure Trust Bank today became the latest finance house to raise the amount of money it expects to pay out for the Financial Conduct Authority motor finance redress scheme.
It had initially forecast that it would pay out £5.5m but this has now soared to £21m following the publishing of the FCA consultation paper.
In a statement today it said: “STB expects to increase its provision for motor finance consumer redress and related costs by £16m to £21m, comprising £16m redress and £5m costs.
If the FCA scheme was implemented entirely in its current form, the Group would expect to increase the provision for redress by a further £6m.
“STB remains committed to ensuring customers receive appropriate redress where there has been customer harm.
“However, it considers that the FCA’s proposed approach to assessing unfairness is not aligned with the Supreme Court judgment in Johnson v FirstRand, where the test for unfairness is highly fact specific and must take into account all relevant factors.
“As there remains uncertainty on the final rules of the redress scheme, the ultimate cost to STB could vary from its estimated provision.”
Other finance firms have much great exposure to the motor finance redress scheme.
