When Justice Is Called a Burden: The Lords, the FCA, and the Cost of Capture

By Steve Conley, Founder – Academy of Life Planning & Get SAFE

When peers call lawful redress an ‘unreasonable burden,’ they reveal how far our system has drifted from serving citizens. The FCA’s job is not to protect bank balance sheets — it’s to uphold fairness in finance.

⚖️ The moment of truth for consumer protection

This week’s House of Lords hearing laid bare something more troubling than the motor-finance scandal itself: the state of regulatory capture in Britain’s financial system.

Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), faced two hours of interrogation from peers who accused the watchdog of being “asleep at the switch” — not for failing consumers, but for daring to make lenders accountable.

Their grievance?
That the FCA’s redress scheme for mis-sold motor finance stretches back 18 years — far enough to reach millions of unlawfully inflated car loans made since 2007.

Their argument?
That this lookback is an “unreasonable and disproportionate burden on lenders.”

What they didn’t say is that many of those lenders broke the law by allowing car dealers to hike interest rates in secret to fund hidden commissions — a practice the FCA itself banned in 2021.

💰 When peers defend power, not people

The Lords committee that “grilled” the FCA includes several with long ties to the City — former bankers, lawyers, and financiers whose instincts remain loyal to the institutions they once served.

They did not ask:

Why it took the FCA eight years after launching its first motor-finance review (in 2017) to act.
Why millions of consumers are still waiting for redress.
Why misconduct that extracted billions from working families went unchecked for so long.

Instead, they asked whether banks were being treated unfairly.

That is the language of capture — where the inconvenience of accountability is recast as a “burden,” and justice is treated as a threat to market confidence.

🧩 The anatomy of a captured system

This case exposes three layers of systemic failure:

Corporate capture – Lenders lobby to redefine “unfairness” so that fewer victims qualify for compensation.
Regulatory capture – The FCA, under pressure for years, designs a cautious scheme to avoid confrontation rather than ensure restitution.
Political capture – Peers amplify the industry’s talking points from the chamber floor, turning oversight into protectionism.

The result?
A system that spends decades debating the limits of liability, while the victims of unfair finance quietly shoulder the cost.

🔍 Why this matters beyond motor finance

The motor-finance scandal is not an isolated failure. It is part of a recurring pattern in financial services:

When wrongdoing is exposed, the industry cries disproportionate.
When reform is proposed, Parliament calls it burdensome.
When victims seek redress, they are told it’s time to move on.

This same pattern can be seen across pension transfers, mini-bonds, mortgage securitisation, and tokenisation. Each time, the language of innovation and growth masks the erosion of consumer protection.

🌍 What we stand for

At the Academy of Life Planning and Get SAFE, we take the opposite stance.

We believe that:

Accountability is not a burden; it’s the foundation of trust.
Redress is not a cost; it’s the price of integrity.
Regulation should not be captured by capital, but guided by conscience.

The FCA’s duty is to uphold fairness — not to preserve the comfort of those who profited from breaking the law.
And the duty of Parliament is to serve citizens, not shield corporations from justice.

🔔 A call for courage

If we are serious about restoring trust in finance, the real question is not whether the FCA’s scheme goes back too far, but why it took so long to get here.

We should not ask how to make justice cheaper for banks.
We should ask how to make accountability work for people.

Until we do, Britain will remain a place where those with power rewrite the rules — and call it regulation.

⚖️ Context: The Lords’ “Interrogation” of the FCA

The House of Lords Financial Services Regulation Committee is nominally tasked with scrutinising the FCA. In practice, it’s composed largely of City grandees — many with historic or current ties to the financial industry.
During yesterday’s session:

Lord Forsyth (former banker and Thatcher-era minister) accused the FCA of imposing an “unreasonable and disproportionate burden” on lenders by extending redress back to 2007.
Lord Grabiner (QC, commercial lawyer for major banks) questioned the FCA’s “lack of clarity” and challenged its statutory reach.
Lord Vaux (former corporate finance executive) said he was “frustrated” by the FCA’s reluctance to admit mistakes.

These are not neutral consumer advocates — they are representatives of the financial establishment calling the watchdog to heel.

💰 The Real Issue: Accountability for Misconduct, Not Red Tape

Let’s be clear about the sequence:

Motor finance firms used “discretionary commission arrangements” (DCAs) that incentivised dealers to raise interest rates to boost their own commissions.
This practice was banned in 2021, but it had already distorted millions of agreements.
The Supreme Court ruled (August 2025) that such undisclosed commissions can constitute unfair relationships under the Consumer Credit Act.
The FCA’s redress scheme merely operationalises that ruling — giving affected consumers a route to claim what they’re owed.

So when peers say “the lookback is disproportionate,” what they’re really saying is:

“Please don’t make our banking friends pay for 18 years of unlawful behaviour.”

🧩 Structural Capture on Display

This episode highlights three layers of systemic capture:

Layer	Manifestation	Implication
Corporate Capture	Lenders lobby hard to redefine “unfairness” (e.g., arguing 35% commission isn’t unfair unless it exceeds 55%).	Redefines consumer harm downwards.
Regulatory Capture	FCA delays enforcement for eight years, then designs a cautious scheme to avoid litigation.	Consumers wait nearly two decades for redress.
Political Capture	Peers amplify industry talking points under guise of “scrutiny.”	Pressure mounts on FCA to water down scheme before implementation.

🚨 What’s at Stake

For Citizens: Tens of thousands of families overpaid for cars, often financed at inflated interest rates without knowing it. Average compensation may only be a few hundred pounds — but collectively it represents justice for structural exploitation.
For Regulators: If the FCA caves under Lords’ pressure, it signals that even after a Supreme Court ruling, elite lobbying can rewrite the outcome.
For Democracy: This reinforces the perception that the UK’s financial system operates on a two-tier justice model — one for consumers, one for the City.

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Contact: steve.conley@aolp.co.uk
Website: www.aolp.info
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