‘Nothing stopping lenders paying tomorrow if they want to’: What we learnt from the FCA’s briefingpublished at 18:44 BST
Mitchell Labiak
Business reporter
The Financial Conduct Authority’s (FCA) online briefing to journalists has just ended.
Here are three things we’ve learnt about its payout plans:
1) The compensation scheme has been split into two as legal protection
The FCA insists it has the powers to include agreements before 2014 in its compensation scheme, but lenders argue the FCA does not have authority to go back that far.
As such, it has created two schemes. One covering 6 April 2007 – 31 March 2014 and one from 1 April 2014 – 1 November 2024.
If the banks and lenders mount a legal challenge on the scheme for the earlier period, the FCA said its other scheme would be “insulated” from that challenge.
2) How soon might people get payments?The FCA says there is “nothing stopping lenders paying tomorrow if they want to”.
However, it adds it is more likely that people who have already filed a claim will receive a payout this year if their claim is successful, and next year if they have not yet made their claim.
3) Advice against using a claims manager and the FCA scheme
Claimants either need to use an FCA scheme or use a claims management company, the authority says. People “can’t go down both routes at one the same time,” the FCA adds.
People are advised to use the FCA’s schemes, the authority says, as it argues there is “no credible evidence that people will get a better payout by going to court”. This is something claims management companies and lawyers representing claimants disagree with.