Consumer group to challenge FCA redress scheme

Campaigning group Consumer Voice is to mount a challenge to the Financial Conduct Authority (FCA) car finance redress scheme claiming it “leaves too many people short changed”.

Alex Neill, co-founder of Consumer Voice, said: “We support a redress scheme, but this one does not go far enough.

“Millions of drivers were overcharged through hidden and unfair commission, yet the FCA’s scheme risks leaving many of them missing out on hundreds of pounds they’re owed.”

The group claims the benchmark interest rate adjustments used in the scheme “underestimate the true scale of overcharging” and that the FCA’s “standardised” assessments of consumer loss do not match actual financial loss in many cases.

In a statement, Consumer Voice said: “Drivers will now be asked to accept a standardised payout they have little real ability to challenge. Under the scheme, interest is added using a set formula. Consumers cannot challenge that rate applied – even if they struggled with payments, borrowed elsewhere at higher rates or faced financial pressure as a result of their car finance.”

Consumer Voice says it has put the FCA on notice of its intention to take the regulator to the Upper Tribunal.

“The formula the FCA is using appears too narrow and the interest approach is too limited,” it explained.