Financial regulator proposed Prevention scheme The wrong sales for car finance are “completely impractical”, the business body for the car finance industry has said.
Stephen Hadril of the Finance and Legend Association (FLA) told the BBC that the prevention plan would cover the loan back by 2007, as firms and customers could not have paperwork for that time.
On Friday, the Supreme Court ruled the commissions hidden from lenders to dealers on car loans, meaning that millions of motor drivers would not be able to claim for wrong sale.
However, the decision especially abandoned the possibility of compensation claims for large commissions.
On Sunday, the UK’s Financial Watchdog, Financial Conduct Authority (FCA) said it would initiate counseling on who should be eligible for compensation and how much they should get in October.
This estimates that the prevention plan will cost the industry between £ 9BN and £ 18bn, although the individual victims of incorrect sales are likely to be less than £ 950 per deal.
FCA said it is “forecast[s] As far as possible firms are required to make customers aware, they can be eligible and what they may need to do “and this claim should cover back dating agreements in 2007”.
But while talking to the BBC Today program, Mr. Hadril said: “[There is] A major concern, in fact, about the plan to return in 2007. I think it is completely impractical.
“This is not only for firms that do not have details about contracts, so the customers are not.
“And, if we are going to make careful decisions about who get compensation, who prevents, and who doesn’t do – you need that information. I think it’s not right to go back yet.”
He also said that the cost of a prevention scheme can mean that lenders provide low car financing scheme to customers in the near future.
“That cost must be absorbed somewhere.”
“Ultimately, it becomes more expensive borrowing, becoming more expensive for the consumer.”
The FCA has stated that it “expects a healthy finance market for new and used cars, which we propose to continue any prevention plan”.
On fridayThe Supreme Court focused on paying the commission made by car dealers by banks and other lenders along with finance companies in two of the three important testing cases.
However, it except the possibility of compensation claims for large commissions, which was considered unfair by the court.
The industry is expected to cover the entire cost of any possible compensation plan, including any administrative costs.
Those who have already complained do not need to do anything, the FCA said, advised those who have not yet complained to contact their car loan providers instead of using a claim management company.
