City watchdog attacks consumer group in £9.1bn car loan payout battle

The Financial Conduct Authority is seeking to have a consumer group’s legal challenge over car loan mis-selling compensation thrown out, alleging a lack of transparency about its funding and commercial ties to a claims law firm. The FCA’s legal filings, submitted on Wednesday, urge judges to dismiss applications including one from Consumer Voice, a group pushing for higher payouts for borrowers overcharged on car finance between 2007 and 2024 [1]. The regulator said Consumer Voice “has failed to disclose details of, or explain, its funding of its application, or the nature of its relationship with its solicitors,” Courmacs Legal [1]. The FCA’s current redress scheme envisages an average payout of £830 per mis-sold loan, part of a wider £9.1bn compensation programme affecting lenders such as Lloyds Banking Group, Santander, and the finance arms of Volkswagen and Mercedes-Benz [1]. Consumer Voice argues the scheme will short-change victims and accuses the FCA of prioritising lenders’ balance sheets over consumer protection [1]. The regulator contends that Consumer Voice and Courmacs “operate for profit in the sphere of claims management” and that the consumer group “therefore has commercial incentives of its own” [1]. Courmacs is providing pro bono representation in the case but would take up to 30% of client settlements if larger awards are secured [1]. The FCA also noted that Courmacs had previously hired Consumer Voice to conduct consumer research [1]. Consumer Voice, founded in 2023 by former Which? staffers Nikki Stopford and Alex Neill, partners with law firms to help consumers claim redress from companies [1]. Its website states it receives a commission when members join a law firm’s case and earns money through communications work raising awareness of claims [1]. The group has promoted actions against Amazon, Facebook, Mastercard, Apple iCloud, and Sony PlayStation [1]. Alex Neill rejected the FCA’s assertions, calling it “disgraceful that a public body would include allegations in legal pleadings despite having been repeatedly informed that they are untrue” [1]. She said Consumer Voice “make no money whatsoever from car finance mis-selling referrals” [1]. The dispute is the latest flashpoint in a scandal that has prompted heavy bank lobbying and a contentious intervention by Chancellor Rachel Reeves [1].