Potential UK car finance compensation scheme would be smaller than PPI, says regulator
The Supreme Court overturned a landmark ruling on car finance commissions on Friday, easing fears among banks about the cost of an industry-wide redress scheme, though lenders will still likely face claims for overcharging in some cases.
In response to Friday's ruling, the Financial Conduct Authority (FCA) said it would confirm before markets open on Monday whether it planned to consult on a new redress scheme.
"We would expect any outcome, if we are to move forward with an industry-wide compensation scheme, to be substantially less than the PPI episode," FCA chief executive Nikhil Rathi told the Sunday Times newspaper before any decision had been made public.
He did not comment on a specific number, according to the report.
Mis-selling of payment protection insurance cost lenders over 40 billion pounds ($53 billion) to redress between 2011 and 2019.
Lenders, including Lloyds Banking Group (LLOY.L), opens new tab, Close Brothers (CBRO.L), opens new tab, Barclays (BARC.L), opens new tab and the UK arms of Santander (SAN.MC), opens new tab and Bank of Ireland (BIRG.I), opens new tab, have already set aside nearly 2 billion pounds between them to cover potential motor finance compensation claims.
($1 = 0.7531 pounds)
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