Back in 2017, the FCA announced a review of the motor finance industry.
It published its final report in April 2019 but work continues in regard to concerns over commissions and we can expect updated CONC rules later this year following their latest consultation which closed last month.
In addition to this specific work, normal FCA business within our sector goes on and this week sub-prime lender Moneybarn Limited was fined £2.77 million. That figure is discounted from nearly £4 million on the basis that Moneybarn accepted the ruling and did not appeal.
The fine relates to how Moneybarn treated customers who got into arrears and Moneybarn’s general failure to clearly advise customers of the likely financial consequences of failing to keep up with payments. The FCA found that more than 1400 customers were pressured into agreeing unrealistic repayment plans once they fell into arrears.
In addition to the fine, Moneybarn have voluntarily provided redress of more than £30 million to all 5,933 customers potentially affected by the failings raised by the FCA regardless of whether the customers could demonstrate that they have suffered any financial detriment.
With the spotlight still on the industry, it is more important than ever to keep on top of your compliance requirements to avoid fines coming your way via customers complaining to the Financial Ombudsman Service (FOS).
Further, if a finance company is chasing you for any clawback against any upfront payments you have been given by them as an incentive to refer a certain level of business, please do consult us.
On average 55 vulnerabilities are identified daily.
What can I do?
Review your organisations priorities and ask ‘can we afford a breach?’. What do I do during an incident? Who do I involve? When do I involve the ICO?
If you’re unable to answers these questions, you need help from the experts.
