FCA ‘worked backwards’ to justify motor finance redress, say lenders
A trio of motor finance lenders have accused the City watchdog of “working backwards” to justify its redress scheme that is set to cost the industry billions. In new documents, Mercedes-Benz’s financial services arm, which has set aside as much as £400m in payouts for the car mis-selling scandal, said the Financial Conduct Authority’s (FCA) [...]
Three major lenders have criticized the Financial Conduct Authority (FCA) for "working backwards" to justify its £9.1 billion motor finance redress scheme, which is set to cost the industry billions. The Financial Services arms of Mercedes-Benz, Volkswagen Financial Services, and Credit Agricole have accused the regulator of starting from the erroneous conclusion that such arrangements were harmful and working backwards to justify that view.
Mercedes-Benz, which has set aside up to £400 million in potential payouts, said the FCA's "one-size-fits-all approach" risks failing the entire scheme. The watchdog plans to defend the scheme in hearings that could last until February 2027.
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