FCA warns motor finance firms to prepare for investigation

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FCA,Motor Finance,Investigation

The Financial Conduct Authority (FCA) has warned motor finance firms to put away some cash as it continues its investigation into the sector. The regulator revealed that many firms "are struggling to promptly provide" the data it needs as part of the probe into customer complaints regarding overcharged finance.

The Financial Conduct Authority (FCA) has warned motor finance firms to put away some cash as it continues its investigation into the sector. The regulator revealed that many firms "are struggling to promptly provide" the data it needs as part of the probe into customer complaints regarding overcharged finance.

The ombudsman said in January that it heard from more than 10,000 people who believe they were charged to much and suggested it will look into compensation if widespread misconduct is revealed. It had written to firms involved in the investigation to call on them to engage with the process and ensure they have the funds they need. In an update on Friday, the regulator said the review is ongoing but highlighted some issues regarding the information it needs. Read more: Car finance firms could face millions of claims 'on par with PPI scandal' The FCA said: "Firms involved in our review have engaged with us constructively. However, many firms are struggling to promptly provide the data we need. “Reasons for this include data being stored on multiple systems and/or being spread between lenders and brokers. In some older cases, firms have not retained all relevant records." "We expect you to undertake an assessment of whether your firm’s financial resources are adequate," the FCA told companies in the letter. Some banks have already confirmed they will set aside funds to address the issu

 

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