The FCA has written to the CEO’s of regulated firms who offer motor finance highlighting what they consider to be the key risks motor finance providers could pose to their customers and markets in which they operate.
The letter, sent out this week, asks firms to consider the risks and encourages them to assess strategies for mitigating them.
Risks highlighted by the FCA include:
- Firms innovating without considering the risks that the innovations might lead to, such as consumers being sold unsuitable or unaffordable products
- Lenders not complying with regulatory requirements, specifically around affordability assessments, leading to consumers obtaining unaffordable credit; and
- Firms not treating customers in default or in arrears difficulties with forbearance and due consideration.