Add thelocalreport.in As A Trusted Source
The UK financial watchdog is set to adjust its proposed motor finance compensation scheme after hearing from more than 1,000 businesses and consumers, its boss has told MPs.
Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), said some lenders have so far “focused too much on the things they don’t like” about their offers.
The FCA’s consultation opened on 7 October and closed on 12 December, and invited feedback on its plans for an industry-wide compensation scheme.
The regulator is hoping to compensate motorists who were mis-sold car loans between 2007 and 2024 because they were not properly informed about commissions paid to brokers, including car dealers.
Under the current proposals, around 14 million car finance deals could be eligible for compensation, with people estimated to receive an average of £700 per deal.
The scheme is expected to be launched early next year.
appear before treasury committeeMr Rathi said: “There were a wide range of over 1,000 responses to our consultation which concluded last week, with over 800 individual consumers responding with their views.
“We look at a range of approaches and where there is good strong evidence that might lead us to adjust what we have proposed so that we get a fair, proportionate scheme, we will consider that evidence.”
Mr Rathi gave examples of cases where 0% interest was charged on car loans, adding that the regulator was “hearing the argument that there was really no case for compensation with it”.
The proposals have faced significant opposition from Centro and other lenders. lloydsIn particular challenging the FCA’s calculations of the amount lost by consumers.
“Somehow, we have to figure it out,” Mr. Rathi insisted.
“Even though you may say ‘it doesn’t work’, what alternative do you have?
“And I would say the same thing to both consumer law firms, but I would also say to lenders who focus too much on things they don’t like, but they also need to help us find solutions if that’s the case.”
Elsewhere in the Treasury Committee session, Mr Rathi said no cases of insider trading had come to light after taking office. Budget The Office for Responsibility (OBR) last month accidentally published its budget analysis almost an hour early.
The watchdog’s chairman, Richard Hughes, resigned after the leak.
Mr Rathi told MPs: “During the period between the download of the Economic and Fiscal Outlook and the Budget Statement, liquidity went down because I think there was too much trading.
“But we haven’t identified anything that suggests there was insider trading or anything like that.”
Mr. Rathi said FCA Had received “very good cooperation” from OBR And its board “takes this very seriously and we will provide them with specific training”.
He also said the FCA is considering updating its guidance for firms and public bodies, including the suggestion that leaked information is better kept online rather than “withdrawn prematurely”.