12th Apr 2024 08:55
(Alliance News) - The UK Financial Conduct Authority on Friday said it has reminded motor financing companies to maintain adequate financial resources at all times as it continues its review of their activities.
The FCA is currently reviewing the use of discretionary commission arrangements, by which lenders allow dealers or brokers to determine the interest rate charged to customers.
In January, the FCA initiated a review after the Financial Ombudsman Service received complaints from more than 10,000 people who were concerned they had been charged too much.
Some of the complaints related to Barclays PLC, which on April 3 launched a legal challenge against a ruling that deemed the bank had unfairly paid commission to a broker, the FCA confirmed.
As the review continues, the FCA said it has advised firms to continue investigating complaints and consider government guidance on responding to data subject access requests.
"Firms involved in our review have engaged with us constructively. However, many firms are struggling to promptly provide the data we need," the regulator said on Friday.
"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."
The next steps of the review will be laid out on September 24 at the latest, the FCA said.
Barclays shares were up 0.7% at 185.02 pence in London early Friday.
By Elijah Dale, Alliance News reporter
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