Moneybarn fined by the FCA


You need to advise customers of the likely financial consequences of failing to keep up with payments.

Author: Nona Bowkis
Reading time: 2 minutes

This article is 2 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

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. 

Nona Bowkis

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.