9:01 am, August 1, 2017
THE Financial Conduct Authority (FCA) has revealed its plans for a review of motor finance.
With the majority of new car finance on PCPs, concern has been raised that these may have been mis-sold and that car buyers were not fully aware of the consequences.
Although it is not a full-blown investigation, it will be looking into ‘potential areas of consumer harm in the motor finance market’.
The FCA has now established the key areas that it’ll be focusing on. This includes whether firms are taking the right steps to lend responsibly, if there are conflicts of interest from commission arrangements, if information is provided to customers in a clear and transparent way and whether firms are managing the risk that asset valuations could fall.
The FCA explained: ‘We are taking forward a range of work to help us to answer these questions, and to decide what further interventions may be necessary.
‘This includes supervisory work with FCA-authorised lenders, detailed analysis of millions of anonymised credit reference agency records, and careful scrutiny of firms’ sales practices and processes.
‘We are also working closely with the Bank of England and the Prudential Regulation Authority, who are considering the risks raised by the expansion of motor finance that fall within their regulatory remit.’
The findings will be published in the first quarter of 2018.
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