LONDON (dpa-AFX) - Lloyds Banking Group (LYG, LLOY.L, LLD.DE) acknowledged the recent announcement and consultation paper issued by the Financial Conduct Authority or FCA regarding a proposed industry-wide redress scheme for motor finance.
Lloyds Banking Group said it is currently assessing the implications and impact of the consultation, particularly in relation to its existing provisions for motor finance-related matters. The Group intends to update the market as appropriate once its evaluation is complete.
Motor finance encompasses various financial products-such as hire purchase, personal contract purchase (PCP), and leasing-that enable consumers to obtain vehicles through monthly payments instead of paying the full price upfront. These agreements typically include interest charges and may offer options to buy, return, or refinance the vehicle at the end of the term.
The FCA's proposal aims to address concerns around historical commission arrangements and potential overcharging in motor finance agreements.
According to FCA, the payouts on an estimated 14 million unfair motor finance agreements could begin next year, under a proposed industry-wide compensation scheme from the Financial Conduct Authority (FCA).
The FCA projects that affected individuals may receive approximately 700 pounds per agreement on average. Based on its estimates of consumer participation, total compensation from lenders could reach 8.2 billion pounds.
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