Car Finance Lenders Rush To Settle Before Anyone Finds The Calculator
Early compensation offers enter the car-finance saga, arriving just before the calculator and several awkward questions.
LONDON, Lenders including Barclays are preparing early compensation offers for drivers affected by mis-sold car loans, before legal challenges to the Financial Conduct Authority’s central redress scheme get properly under way. The car-finance saga has acquired some urgency. Institutions are trying to put money within reach before the legal process finishes working out where it left the measuring tape.
The essential facts remain stubbornly uncomic. Some drivers were mis-sold finance, lenders are considering compensation, and the FCA’s proposed route to redress faces legal challenges.
The timing is excellent, in the way a cake left outside a meeting labelled “full accounting” is excellent. Something has been placed on the table while people are still disputing the table itself, the chairs, and whether the person who ordered it belongs in the minutes.
“Large enough to be technically visible, but small enough to hide behind a teaspoon.”
Somewhere in the national imagination, a settlement calculator is turned face down whenever a borrower asks if the final figure includes everything. Another calculator is reportedly kept in a cupboard for emergencies. It sits beside a magnifying glass, three unsigned forms and a note saying: “Please do not let them discover percentages.”
Mabel Quince, deputy director of the Bureau of Pre-Emptive Settlements and Emergency Decimal Placement, said the ideal payment should be “large enough to be technically visible, but small enough to hide behind a teaspoon”. The bureau stores its minutes in a biscuit tin. Nobody has seen it share a room with a spreadsheet.
That is the whole joke. Offers are being prepared before the legal challenges have settled the larger question of how compensation should be calculated, so a borrower may receive an answer while the question is still developing. The financial sector calls this efficiency. A tired kitchen table calls it receiving a receipt for a house while asking whether anyone ordered a sandwich.
Colin Rook, who happened to be standing nearby and holds the honorary title Customer Who Brought A Pencil, said he had always wanted a settlement so early it had not learned to count. “I was promised clarity,” he said. “What arrived was a number wearing a tiny hat.” His pencil requested a second opinion.
Drivers still have to decide whether an early offer is worth taking while the wider redress scheme remains tied up in legal challenges. There is also the ordinary work of checking paperwork, locating the original agreement, and seeing whether compensation has been rounded down to the nearest grain of rice. Meanwhile, the settlement process continues putting a lid on the saucepan before anyone has checked the recipe. The national calculator advises borrowers to read the small print, preferably with a magnifying glass and a supportive adult from the Department of Extremely Obvious Arithmetic.