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A depressing read in a mainstream newspaper.

https://www.theguardian.com/business/2025/nov/02/car-finance-redress-scheme-rob-victims-4bn-fca

Hyperbole, exaggeration, no attempt at critical analysis. Journalistic endeavour completely focused on who can shout the loudest and be the most aggrieved.

Old-fashioned me thought that being 'robbed' meant someone holding a knive or gun at your throat. Or breaking into your house or your bank accounts and helping themselves to your possessions.

But no, it's now considered daylight robbery if you signed a DCA agreement with commission to the dealer who arranged a loan,.

Even when you didn't actually lose anything because the dealar actually gave you the lowest possible interest rate, you should still be recompenesed at an incredible 8% pa.

No wonder the future economic landscape looks very rocky. It's now based on who shouts the loudest rather than who makes the most sense.

Decided to drip in a small amount Buy at 423.8, but as usual with CBG, this was inevitably followed by a further drop!

It's certainly going to be long and drawn out but I am learning a lot here.

What really puzzles me is that the FCA seem absolutely determined to conjure up a redress scheme that provokes multiple legal challenges.

I don't know if this is a very cunning plan , or a secret death-wish, or that the Chief wants to have a place in the House of Lords as a consumer champion.

The legal challenges are going to be both robust and inevitable because:

1. No lender could sit back idly and watch their redress amount balloon by hundreds of millions

2. The proposed redress scheme is full of holes (and includes an amazing slap-down of the Supreme Court judgement)

Oooh - in reply to Sabrage's question to knot "Can we be sure that CBG legal team are as up to speed as you are?"

I can categorically state (from working as a 'hired gun' in regulatory compliance) that these huge financial impacts strongly drive companies' next steps:

1. they become more prepared to pay big sums for best external advice

2. a wide number of legal and technical experts offer to take on the 'headline-making' challenges

As the proposed FCA redress scheme increases some lenders' costs by hundreds of millions, it is inevitable that lenders will be prepared to launch legal challenges, even if the bill ran into tens of millions of pounds.

Ah, yes, the infamous retrospectoscope where the regulator can never be wrong. I've been at the receiving end of that too..

Regulator: Rejected. Your scheme is non-compliant.

Me: What, not fair? You previously approved several similar ones from other vendors.

Regulator: Yes, true. But we are going to be fair to you, we have now retrospectively amended the regulations and gone back to rescind all previous approvals for other vendors.

Https://cardealermagazine.co.uk/the-doors-would-be-shut-within-minutes-why-dealers-wont-be-asked-to-fund-fca-redress-scheme/317512

Some interesting counter-points regarding the FCA consultation from a automotive legal expert:

,,,,,if you think, “well, I’m not happy about this” then tell them because that’s the whole point of a consultation.

‘Supposedly they’ve not made their decision. They’ve not made the decision that it’s going to be £950 quid. They haven’t made that decision, they’re just setting that to see if you agree with those [figures].

‘They’ll come out with their ideas and then they’ll want feedback. I would suggest that especially the bigger players – the car supermarkets – just write in. You are allowed to do that and that’s well within your remit.’

It’s all about headlines but when you read the nitty-gritty actually, they took a small sample size and have come up with this number and they think that equates to these millions of pounds.

‘That unfortunately is where we’re at now.’

Each FOS complaint will incur a £650 charge. So, the FCA is likely to emphasize that if lendors don't agree to their redress scheme, then they will be punished by the subsequent flood of complaints to FOS.

Already, Martin Lewis of Money Saving Expert is advocating such tactics if the consultation does not agree to cover 2007:

"MSE & I will be arguing for 2007 in our consultation response. As if not, it could break the whole redress system and see us having to suggest people going en masse via the ombudsman or courts instead, clogging them up."

I think the system is stacked against the lendors.

The (incredibly high) up to £18 billion FCA estimate- is that because of the ridiculous administrative costs to lenders?

The Finance and Leasing Association state that lenders are charged £650 per claim, irrespective of fault.

https://fla.org.uk/motor-finance-commission-developments/

So, for Ms. Hopcraft's (now dismissed) case, the commission paid by Close Brothers was a paltry £183, but the FOS would have charged Close £650 for the pleasure of dealing with the complaint?

Yes, you are absolutely right. I think the "clear as mud" statements from the FCA are likely to lead to more court cases.

The FCA position now smacks of posturing and playing to the gallery, to demonstrate how powerful the FCA are. Instead of starting with presumption of innocence, the FCA have already judged that some firms are guilty of breaking the rules, and must therefore be punished. They sound like they intend to force the redress scheme down the throat of the lenders. This may well backfire and lead to more legal challenges.

I would certainly have taken on this case myself, except that sadly my regululatory expertise is not in financial or legal issues!

I fully agree with the views here that the FCA's actions over the weekend are truly mind-boggling.

I'm not a financial or legal expert, but I have worked for clients in another field to appeal against regulatory decisions, and to submit court testimony.

My experience with regulators is that they:

- are single-minded

- always like to be the ones in the driving seat, and calling the shots

- don't like to lose face or climbdown,

- may take all sorts of convoluted actions (including retrospectively altering rules) to defend their position.

Hence, all the bizarre wriggling that is going on as the FCA attempts to blunder their way through the mess that they created (with no easy way out for them).

No, didn't see what FCA are blustering on about this morning, but I did see on the Beeb that there was a blistering reply from Mr. Hadrill, Finance and Leasing Association. https://www.bbc.co.uk/news/articles/cx2909pvddlo

Mr Hadrill said: "[There is] a major concern, really, about the redress scheme going back to 2007. I just think that's completely impractical.

It's not just firms that don't have the details about contracts back then, the customers don't either."

Indeed, that was exactly what I said to my wife at breakfast, regarding what fantasy island FCA are living on.

Actually, I have cut and pasted from Nikhil Rathi's statement about No retrospective punishments, 3 August 2025, page 15-16:

https://www.fca.org.uk/publication/transcripts/motor-finance-market-analyst-briefing-august-2025.pdf

One cannot help but admire the FCA Clear as Mud Universe.

On the one hand,

" We're going to consult on a scheme going back to 2007"

But they also say No to retrospective application of new rules:

"what we're looking at here is compliance with the laws and rules in place at the time and it's in that context that we'll also think about the remedy. So there is no retrospective application of rules since 2021 to situations before 2021. The way we think about the remedy is the laws and rules that were in place at that time. Because I’ve always. found that retrospectivity argument quite unconvincing, and I think the Supreme Court has been really clear what the position is there."

So, the actual payout mainly on whether CBG's policies were in line with FCA rules from 2007 onwards.

I'm a lurker, but I am firmly with BasherSmith on this one.

I read things on the Close Brothers Share Chat because I am interested in Close Brothers, and there are a number of very knowledgeable participants here. I am grateful to them for helping me learn so much about motor finance regulation, and the legal processes.

If I want to discuss politics, conspiracy theories etc., there are lots of other places that are dedicated to such topics.