Legal expert at Motor Industry Legal Services (MILS) Professor Henry Blair said it was difficult to know at present how the FCA redress scheme will play out as details are not know yet known on the processes that will be used.
MILS is working with dealers and the National Franchised Dealers Association (NFA) and has urged dealers for some time to gather information on their motor finance transactions over time.
“Some clients are doing a better job than others,” he told Motor Trader.
The FCA is looking at transactions that go back to 2007 and this could prove problematic for dealers, given that companies do purge record legally over time.
Blair said that each motor finance transaction was unique and it will be difficult for the FCA to come up with a solution.
“My personal feeling is it will be difficult to come up with a process that is fair to everyone. These are unique transactions. How will they be efficiently decided,” he said.
He said one solution will be for the FCA to come up with a taxonomy looking at, for example, the size of the commission as a percentage of the deal, which is what happened with PPI.