FLA responds to FCA’s Section 404 motor finance redress scheme

The Finance & Leasing Association (FLA) has responded to the UK Financial Conduct Authority’s (FCA) consultation connected the Section 404 centrifugal concern redress scheme.

Announced successful October, the FCA’s connection would let for compensation payments related to an estimated 14 cardinal centrifugal concern agreements identified arsenic unfair.

These payments could statesman arsenic soon arsenic adjacent year.

While FLA-affiliated lenders enactment a credible redress process for affected customers, concerns stay that the existent connection does not conscionable the FCA’s ain standards.

The relation is calling for adjustments truthful that the strategy lone identifies and compensates consumers “who person really suffered loss”, helps support entree to recognition successful the agelong term, avoids granting compensation erstwhile nary unfair narration occurred, and tin beryllium delivered wrong a applicable timeframe.

The FLA points retired that a “credible” Section 404 FSMA redress programme should uphold fairness for some borrowers and lenders.

In its view, the FCA’s existent attack could effect successful compensation being fixed to galore who did not acquisition harm oregon loss. This could redirect resources from those genuinely entitled to redress.

FLA CEO Shanika Amarasekara said: “Our submission is the merchandise of extended investigation by manufacture practitioners, economists and starring experts from crossed the centrifugal concern market.

“The astir important constituent is simple: a redress strategy indispensable supply redress to those who person suffered nonaccomplishment arsenic a effect of an unfair recognition relationship. Where we disagree from the FCA’s proposals, it is due to the fact that the grounds shows determination are fairer, much targeted and much businesslike ways to execute that outcome.

“All eyes are present connected the regulator and the industry. The champion effect is 1 wherever we enactment unneurotic to present redress swiftly to those who request it, support consumers’ aboriginal entree to finance, and make a strategy that is workable and credible for all.”

In its submission, the FLA proposes alternate methods for assessing liability and user nonaccomplishment and offers suggestions aimed astatine making implementation manageable.

Earlier FLA information indicated a 3% summation successful the measurement of caller user car concern concern successful October 2025 compared to the aforesaid period successful 2024.

"FLA responds to FCA’s Section 404 centrifugal concern redress scheme" was primitively created and published by Motor Finance Online, a GlobalData owned brand.

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