The Financial Conduct Authority has announced that it will be undertaking work in the motor finance market following an increase in the number of complaints from customers. The authority will be using its powers of intervention to consider complaints relating to Personal Contract Purchase (PCP) and Hire Purchase agreements.
The action does not relate to Personal Contract Hire (PCH) agreements.
Announced last week, the FCA’s investigation will look at PCP and Hire Purchase car finance agreements that may have had discretionary commission arrangement in place, that were signed before 28 January 2021. Agreements signed after that date are not being investigated as they fall after such commission structures were banned.
The Authority has confirmed that it will be hiring a skilled person to review historical sales of motor finance agreements involving discretionary commission arrangements. In line with this, a 37-week pause has been applied to the existing 8-week time limit for motor finance firms to provide final decisions on complaints relating to this action.
Two recent rulings from the Financial Ombudsman Service triggered the move, which is being taken by the FCA to ensure firms have not been acting in a way that causes consumer harm.
The BVRLA is in regular contact with the FCA, FOS, members and other trade bodies operating in this space, and will keep members updated with all relevant regulatory or market developments.
Members seeking any guidance or more information on the FCA’s recent action or the BVRLA’s activity in this space can contact the BVRLA team via [email protected].
Commissions will be one of the topics explored in this year’s Compliance Forum programme. The programme has regular unput from FOS, legal representatives and experts from across the sector. More details can be found on the BVRLA website.
