A car finance compensation scheme that has left the City on the hook for up to £18bn in payouts is “completely impractical”, lenders have warned.
Stephen Haddrill, director general of the Finance & Leasing Association said the industry had a “major concern about the redress scheme going back to 2007”.
He told BBC’s Today programme: “I just think that is completely impractical. It is not just firms that don’t have the details about contracts back then, customers don’t either.”
The Financial Conduct Authority (FCA) on Sunday said motorists who had taken out loans to pay for their vehicles which included secret commission agreements between banks and dealers could be in line for payments of up to £950 under a redress scheme.
Lenders could be forced to pay between £9bn and £18bn to customers who were mis-sold car finance. The FCA is now consulting on the proposals.
