Drivers may get compensation offers before car finance saga ends
The FCA has published a factsheet to help drivers, external work out whether they should accept early settlements from lenders. It will include a list of lenders who are making early offers, to ensure claimants with other lenders are not scammed. The regulator said lenders will need to be clear with people about what accepting…
The FCA has published a factsheet to help drivers, external work out whether they should accept early settlements from lenders.
It will include a list of lenders who are making early offers, to ensure claimants with other lenders are not scammed.
The regulator said lenders will need to be clear with people about what accepting any offer means. This includes:
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Being able to keep any payment, even if the final settlement under the central scheme after the legal challenges proved to be smaller
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Claimants would not be able to claim more later if the outcome of the legal challenge meant they would have been paid more
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Accepting an offer takes you out of the scheme and stops any further input from the financial ombudsman
The Finance and Leasing Association, which represents lenders, said: “We want to see consumers receive the fairest outcome in as timely a way as possible and recognise that, in some cases, that may point to early settlement, while in others it may be appropriate to await greater legal certainty.”
But Kevin Durkin, solicitor advocate and director at HD Law, who represented Marcus Johnson who won his case in the Supreme Court, said he had “real reservations” that fair compensation would be offered.
“These are only heightened by reports that just a small number of claimants will receive what could be lowball offers. I fear this is crumbs from the table, for some customers who are highly likely to be owed more, while the vast majority will receive no offer at all,” he said.
The main proposed FCA scheme remains partially suspended, pending legal challenges in February.
Consumer group Consumer Voice said the proposed compensation scheme left “too many people short-changed”. Three lenders – Volkswagen Financial Services, Mercedes Benz Financial Services, and Credit Agricole Auto Finance – are also challenging the scheme.
The UK’s Upper Tribunal has agreed to hear legal challenges to the scheme, with a hearing scheduled from 16 February to 3 March.
Anyone who is concerned about their car finance deal and has not yet complained can still complain directly to their lender. There is information on the FCA website on how to complain for free, external.
