Consumer group Consumer Voice has announced that it is to challenge the FCA’s car finance compensation scheme.
It claims that for many consumers who took out motor finance the way compensation is calculated risks falls short of what they actually lost.
It said it was not challenging the idea of a compensation scheme but instead whether the FCA one is fair and delivers what consumers are actually owed.
Consumer Voice said the FCA had taken a narrow approach to calculating losses and set fixed assumptions that may not reflect real-world outcomes.
It has put the put the FCA on notice of its intention to apply to the Upper Tribunal to review the way the scheme has been designed, particularly how compensation is calculated.
Alex Neill, co-founder of Consumer Voice, said: “We support a redress scheme, but this one does not go far enough.
“Millions of drivers were overcharged through hidden and unfair commission, yet the FCA’s scheme risks leaving many of them missing out on hundreds of pounds they’re owed.
“People have already been let down once by lenders. They should not now be let down again by the regulator that is supposed to protect them. The FCA needs to fix the scheme to ensure it delivers fair and lawful compensation for drivers.”
Lenders and consumer groups have until 27 April to challenge the FCA scheme.
Consumer Voice was formed two by Alex Neill and Nikki Stopford who worked at Which? for over a decade.