City regulator urges judges to dismiss larger payout claims in car loans scandal
Summary
The City regulator, the Financial Conduct Authority (FCA), is asking judges to reject a consumer group's request for higher payouts in a car loan mis-selling scandal. The FCA claims the group, Consumer Voice, has not been open about its funding and possible conflicts of interest. Consumer Voice wants bigger compensation for people who were overcharged on car loans, but the FCA says the group may have its own financial motives.Key Facts
- The FCA wants legal challenges from Consumer Voice dismissed due to lack of transparency about the group's funding and relationships.
- Consumer Voice was set up in 2023 by former Which? staff to push for larger payouts for car loan borrowers affected by commission-based mis-selling from 2007 to 2024.
- The car loan compensation scheme currently involves lenders like Lloyds, Santander, Volkswagen, and Mercedes-Benz, with a total payout of £9.1 billion planned.
- Consumer Voice argues the FCA’s payout scheme undervalues victims, who currently get about £830 per mis-sold loan.
- The FCA alleges Consumer Voice and its legal partner Courmacs operate commercially and have conflicting interests because Courmacs takes a cut of settlements.
- Consumer Voice says it does not profit from car finance claims and that FCA’s accusations are incorrect and misleading.
- Courmacs provides free legal help in this case, but can earn up to 30% from client settlements in other cases.
- The FCA claims Consumer Voice has not fully disclosed details of its funding or business model and may not represent consumers’ interests fully.
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