The Financial Conduct Authority (FCA) is facing four legal challenges against its £9.1bn compensation scheme for victims of the motor finance scandal, creating fresh uncertainty for millions of consumers.
The watchdog confirmed a challenge from consumer group Consumer Voice, represented by Courmacs Legal, which claims the scheme short-changes borrowers. Lenders Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance have also filed lawsuits.
The FCA said it will defend the scheme 'robustly' as the fastest and simplest route for consumers. It added that none of the claims were from individual consumers, and that the challenges delay payouts expected from this summer.
The scheme, finalised in March, offers an average of £830 per mis-sold loan. About £7.5bn is for borrowers, with £1.6bn for administrative costs. The FCA is engaging with all sides and conducting contingency planning.
