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July 18, 2024
PI Global Investments

UK watchdog says car finance mis-selling is ‘not next PPI scandal’

The car finance mis-selling scandal is not the next PPI scandal, a UK watchdog has said. Nikhil Rathi, the chief executive of the Financial Conduct Authority, has moved to play down comparisons with PPI after Martin Lewis’ claims.

“Some – not us – have sought to draw comparisons with PPI,” Rathi said, referring to comments by consumer champion Mr Lewis. “In PPI, the regulator’s work took place over many years, and this, and action on redress, dragged on for some time,” Rathi added.

“I do not anticipate this issue playing out as PPI did, not least because we have intervened early in the interests of market orderliness,” he told the Morgan Stanley European Financials Conference in London. “With motor finance, because of the impact on firms, as well as consumers, we want to clarify matters in a more condensed time frame and on a basis that is robust and fair”, Rathi said.

READ MORE HSBC warns customers over ‘temporary’ change ‘until April 2’

“Critically, this will depend on firms cooperating fully and providing data comprehensively and promptly as well as potentially the speed of any court processes”. He went on: “While certainty is not something I can provide today, and I cannot prejudge what we might find, I can say in my view it is improbable we will find nothing to report as we look at historic motor finance sales.

“Some firms will be better placed than others. We are working hard to get to the bottom of the facts.” Mr Lewis warned in January: “HUGE announcement from @theFCA this morning that has gone totally under the radar.

“It may mean a pay-out for millions who bought a car/van on Motor Finance before 2021. I’ve done back of the envelope numbers and at the top end this could be PPI type scale (that was £40bn), big enough to be a form of Quantitative easing (so real consequences for the next govt as it’ll likely take a year).

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