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The Financial Conduct Authority(‘FCA’) has recently announced that it expects to publish the final rules of the compensation scheme later this month. The FCA also confirmed that if it were to proceed with a compensation scheme, the process would be streamlined for consumers and firms. An implementation period would likely be introduced for a period of three months, with up to five months for older agreements.
What does this mean for consumers?
If a complaint is made before the scheme started, consumers will no longer be asked if they wish to opt out. Within three months, following the end of the implementation period, the lender would inform consumers whether compensation is owed and such amount.
If a redress offer is made to the consumer, they can accept it immediately rather than waiting for a final determination.
The streamlined process would mean millions of people would receive compensation this year.
Why is there a delay?
The lenders requested for an extension from the FCA to prepare for the proposed scheme, as the funds to cover the cost towards the payout for consumers is estimated to be around £11 billion.
The likely introduction of the implementation period will give lenders more time to make the necessary arrangements, meaning it will be a longer wait before consumers will have sight of any compensation owed to them.
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