The FCA has raised concerns around motor finance companies practices causing a lack of transparency, conflicts of interest, and irresponsible lending. In the recently released 2017/18 FCA Business Plan it was announced that the FCA would conduct an exploratory study aimed at identifying who uses these products and to assess the sales process. The FCA want to determine the potential harm that may be caused to consumers and the due diligence that firms undertake before providing motor finance.
The above, highlights that the FCA are actively monitoring the motor industry and that newly authorised consumer credit firms must ensure that they are fully compliant with the rules, specifically within the CONC sourcebook of the FCA handbook. Firm’s must ensure that adequate affordability assessments are carried out, that there are no conflicts of interests that could trigger bad outcomes for consumers, and that consumers are provided with clear information prior to entering into any credit agreements to purchase motor vehicles.