Firms must hold back funds for motor finance probe, warns Financial Conduct Authority

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The UK’s financial regulator has warned motor finance firms to hold back cash as it continues an investigation into the sector.

The Financial Conduct Authority also revealed that many firms “are struggling to promptly provide the data we need” for the probe. Get the best business news, straight to your inbox. Earlier this year, the regulator launched a review into whether people could be owed compensation for being charged too much for car loans, following a high number of complaints.

“We expect you to undertake an assessment of whether your firm’s financial resources are adequate,” the FCA told companies in the letter. The scale of potential settlements over the issue remains unknown, but consumer champion Martin Lewis, said car finance mis-selling has the potential to be the “second-biggest reclaim payout in UK history” after the PPI scandal.

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