FCA warns car finance firms over ‘lost’ data amid £18bn compensation scheme
The City regulator has warned it will challenge lenders claiming to have lost customer records about mis-sold car loans to ensure they get their fair share of a potential £18bn compensation pot.The Financial Conduct Authority (FCA) is considering whether to open its redress scheme to contracts dating back to 2007, but some lenders have complained that they do not have records stretching back that far.Speaking to MPs on the Treasury committee, , the FCA chief executive, Nikhil Rathi, said this would not be accepted as a blanket excuse.“Where a firm says to us that they don’t have the data, we’re not just going to take that at face value.We will look at that very forensically,” he said.
The scheme is meant to draw a line under the car finance scandal, compensating millions of drivers who were overcharged as a result of controversial commission arrangements between lenders and car dealers,It follows a supreme court ruling in August, which upheld one of three consumer complaints over commission,But some lenders argue they may not be able to verify claims that are nearly 20 years old, as consumer data and contracts were likely to have been lost or deleted,While the FCA ordered firms to stop deleting car finance documents in 2024, that will only secure a small portion of the data, given that most banks typically purge customer data after six years,Sheree Howard, the FCA executive director in charge of authorisations, told MPs that lenders could end up retrieving data by working with other companies.
“There is an ability, we think, across quite a high proportion [of firms] to get reasonable data, and … firms can work with third parties to try supplement that data like credit reference agencies,” she said.The FCA announced plans for its redress scheme last month, which will go out for consultation by early October.The regulator estimates that the scheme could end up costing car lenders – which range from high street lenders such as Lloyds Banking Group and Santander UK to specialist lenders such as Close Brothers – between £9bn and £18bn, with borrowers likely to get up to £950 on average for each claim.It followed a high-stake supreme court ruling, in which judges upheld one consumer’s claim, which has deemed to have been “unfair” due in part to the size of the commission paid to the car dealer and how it was disclosed.While FCA bosses said they hoped the bulk of consumer compensation would be paid out next year, Rathi warned that firms that disagree with the payout plan could end up holding up the entire process.
“There may be parties that seek to delay this,” he said.The Treasury committee chair and Labour MP Meg Hillier asked Rathi for the names of companies he was referring to, saying it was important to know whether groups with “deep pockets” were trying to influence the regulator and potentially impact compensation for their constituents.But Rathi refused, suggesting it was something to be discussed in a private session.Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThe Financing and Leasing Association, which represents car lenders, said last month that it could challenge the FCA’s compensation scheme in court if it ends up handing “disproportionate” payouts to drivers.Rathi also pushed back against suggestions that the FCA’s handling of the motor finance scandal had had a “chilling effect” on investment and the wider financial sector.
“If a firm, or their dealers or agents, have not been honest with their customers, that’s not a chilling effect that’s been created by the regulatory system or legal system … let’s be clear about that,” he said,
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The London-listed miner Anglo American has agreed to merge with its Canadian rival Teck Resources, in a deal that will create a $53bn (£39bn) global copper group after both companies saw off takeover attempts.The merger to form one of the biggest copper producers in the world is expected to bring hundreds of job losses at Anglo’s London office as the company prepares to move its headquarters to Vancouver, Canada.The new company will retain Anglo’s primary listing on the London Stock Exchange – held since 1999 - with secondary listings in Johannesburg, Vancouver and New York. But Anglo Teck’s senior leadership team will be based in Vancouver after sweeping efforts by the Canadian government to protect the country’s minerals sector.In London, the tube network was brought to a standstill for a second day as RMT workers went on strike, in a dispute over pay and conditions
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FCA warns car finance firms over ‘lost’ data amid £18bn compensation scheme
The City regulator has warned it will challenge lenders claiming to have lost customer records about mis-sold car loans to ensure they get their fair share of a potential £18bn compensation pot.The Financial Conduct Authority (FCA) is considering whether to open its redress scheme to contracts dating back to 2007, but some lenders have complained that they do not have records stretching back that far.Speaking to MPs on the Treasury committee, , the FCA chief executive, Nikhil Rathi, said this would not be accepted as a blanket excuse. “Where a firm says to us that they don’t have the data, we’re not just going to take that at face value. We will look at that very forensically,” he said
Anglo American to merge with rival Teck in $53bn mining group
The London-listed miner Anglo American has agreed to merge with its Canadian rival Teck Resources, in a deal that will create a $53bn (£39bn) global copper group after both companies saw off takeover attempts.The merger to form one of the biggest copper producers in the world is expected to bring hundreds of job losses at Anglo’s London office as the company prepares to move its headquarters to Vancouver, Canada.The new company will retain Anglo’s primary listing on the London Stock Exchange – held since 1999 - with secondary listings in Johannesburg, Vancouver and New York. But Anglo Teck’s senior leadership team will be based in Vancouver after sweeping efforts by the Canadian government to protect the country’s minerals sector.Justin Trudeau’s administration warned last year that Canada’s government would only approve foreign takeovers of large Canadian mining companies involved in critical minerals production “in the most exceptional of circumstances” to protect its interests in the minerals and metals that are considered crucial in the global transition away from fossil fuels
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