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Lenders braced for legal battle over car finance compensation
Liverpool Echo
|December 16, 2025
MOTOR finance lenders have been sent a major warning over a potential influx of legal battles if the UK's financial watchdog fails to “genuinely compensate” consumers.
Britain's top banks were thought to have been granted some reprieve earlier this year after the Supreme Court upheld the appeals of two lenders in the landmark car finance scandal.
But the second half of the year brought a series of sharp turns in the saga, with the Financial Conduct Authority's (FCA) redress scheme sparking a backlash.
The watchdog was forced to extend the consultation on its motor finance scheme after a number of banks hiked their provisions and took a swing at the regulator for a “disproportionate” scheme. There was equal backlash on the consumer front, with the All-Party Parliamentary Group (APPG) on Fair Banking blasting the City watchdog for a “£4.4bn gap” in the proposed scheme.
This story is from the December 16, 2025 edition of Liverpool Echo.
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