Boss of City regulator accused of threatening consumer group over £9.1bn car loan scheme
Summary
The chief of the UK’s Financial Conduct Authority (FCA), Nikhil Rathi, is accused of threatening a consumer group, Consumer Voice, over its plans to legally challenge a £9.1 billion compensation scheme for mis-sold car loans. The legal dispute involves disagreements about the size of consumer payouts and the FCA's approach to handling challenges to the scheme.Key Facts
- FCA chief executive Nikhil Rathi allegedly warned Consumer Voice of "adverse consequences" if it challenged the car loan compensation plan.
- The compensation scheme is worth £9.1 billion and aims to pay millions of drivers who were overcharged on car loans between 2007 and 2024.
- Consumer Voice claims the compensation offers too little money to consumers, averaging £830 per mis-sold loan.
- FCA says Consumer Voice and its founders have not been transparent about their funding and potential conflicts of interest.
- Three specialist lenders, including Volkswagen Financial Services and Mercedes-Benz Financial Services, are also legally challenging the FCA’s scheme but on different grounds.
- The FCA claims challenges to the scheme risk delaying payments to consumers by Christmas.
- Consumer Voice works with law firms to help consumers recover money and has promoted claims against major companies like Amazon and Mastercard.
- The dispute is part of a broader controversy involving banks, compensation bills, and regulatory efforts to resolve the mis-selling of car loans.
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