FCA faces four lawsuits over £9.1bn compensation scheme for car loan victims

The UK financial watchdog is facing four legal challenges against its £9.1bn compensation scheme for victims of the motor finance scandal. The Financial Conduct Authority (FCA) said that it will defend the scheme “robustly” as the “fastest, simplest route for consumers and the most efficient way for firms to put things right”. The FCA confirmed the Guardian’s report of a legal challenge from the consumer group Consumer Voice , which claims that the scheme massively short-changes victims, which is represented by Courmacs Legal. It is also facing challenges from the lenders Volkswagen Financial Services, Mercedes-Benz Financial Services and Crédit Agricole Auto Finance. The FCA said none of the claims received are expressly in the name of any individual consumers. “We will defend the scheme robustly as lawful and the best way to resolve such a widespread, long running and complex issue,” the FCA said. “These legal challenges create fresh uncertainty for millions of consumers and for the second largest consumer credit market.” The FCA is currently due to hand aggrieved borrowers £830 on average for each mis-sold loan . The FCA said that it is “engaging at pace” with lenders and consumer groups to understand the views of all sides as it looks at next steps for the scheme, including “contingency planning”. …