Car finance redress plan 'impractical', says trade body
Summary
The Financial Conduct Authority (FCA) proposed a plan to compensate people for car finance mis-selling, which the Finance and Leasing Association (FLA) criticized as unrealistic. The plan would cover deals going back to 2007, but concerns exist about the availability of needed paperwork. The Supreme Court ruled that hidden commissions in car loans were not illegal, though claims for large commissions might still be possible.Key Facts
- The FCA suggested a compensation plan for car finance mis-selling.
- The scheme might cover loans dating back to 2007.
- The FLA believes managing claims from 2007 is impractical due to missing documents.
- The Supreme Court decided hidden commissions were lawful.
- Compensation for large commissions could be allowed.
- The plan's cost could range from £9 billion to £18 billion for the industry.
- Individual customers may get less than £950 per affected deal.
- The FCA expects that the car finance market will remain stable despite any compensation plans.
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