Britain's FCA proposes motor finance complaints extension
LONDON, Nov 13 (Reuters) -Britain's Financial Conduct Authority said it would consult on extending the time firms have to respond to complaints about motor finance commissions, pending a legal appeal that could pave the way for a multi-billion pound consumer redress scheme.
The watchdog said on Wednesday it would write to the Supreme Court asking it to decide quickly whether it will permit lenders to appeal a crucial recent Court of Appeal judgment.
That judgment ruled it was unlawful for car dealers to receive a commission from banks providing motor finance, without obtaining the customer's informed consent.
The proposed complaint extension is expected to cover the period until the court decides whether to grant permission to appeal.
Since that judgment, the FCA said it has undertaken extensive industry engagement and found that firms are likely to receive a high volume of complaints.
Any complaint extension would allow them to prevent disorderly, inconsistent and inefficient outcomes for consumers making complaints, motor finance firms and the market, the FCA said.
The FCA also said firms were likely to need to consider whether they should make any financial provisions as complaints need to be handled in line with law.
Analysts have said it is hard to estimate the ultimate total cost to the industry, but the sector's total compensation bill could reach 16 billion pounds ($21 billion), making it the costliest consumer banking scandal in Britain since the faulty sales of payment protection insurance.
Lloyds LLOY.L has already set aside a 450 million pound provision to cover possible redress linked to an ongoing regulatory review into charging by car finance lenders.
Reporting By Sinead Cruise, editing by Lawrence White
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