The FCA has published a series of Regulatory Priorities Reports across the various financial services sectors. These reports try to put everything in one place for a sector, such as what the FCA has done and is going to do, growth and working with industry, publications, speeches, etc.
This article summarises the Consumer Finance Regulatory Priorities Report. This is a big and broad sector with many firms covering Lenders (including debt purchasers), Hire Firms, Credit Brokers (such as motor dealers), Debt Advice providers, Debt Collectors, Credit Reference Agencies and Credit Information Service Providers, Claims Management Companies and Credit Unions. The FCA says over 45 million people in the UK use credit.
The FCA’s 3 priorities in this sector and their expectations of firms are:
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Consumers can access credit that meets their needs
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Lend responsibly
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Consider how to help currently excluded consumers
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Firms support consumers who struggle with debt by providing appropriate and accessible support for consumers
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Consumers can complain when things go wrong and get appropriate redress
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Handle complaints properly
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Prepare for a potential motor finance redress scheme (Note this report was published before the FCA’s announcement of the Motor Finance Redress Scheme at the end of March and which ITC has commented on separately)
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Provide fair value claims management services
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Reflecting the broadness of the sector, not all the above directly apply to motor dealers, with several of the points being more in the lenders’ domain.
Underpinning the FCA’s approach, is the Consumer Duty which is integral to how regulated firms treat their consumers.
Elsewhere in the report the FCA state that over 800 financial promotions about motor finance claims were amended/withdrawn, including where CMCs had not prominently made clear that consumers can make a claim for free themselves. The FCA publicly mentions that it has opened an Enforcement investigation into The Claims Protection Agency Limited (TCPA) following concerns about its advertising and sales tactics in relation to potential motor finance claims.
The FCA says that it will monitor strategic harms through data using improved credit regulatory returns data to make quicker, more targeted interventions and to better assess how the market is functioning. Therefore, it continues to be vital that your regulatory reporting to us is as accurate as possible as we then report onto the FCA.
The FCA states that the appointed representative (AR) population in consumer finance has grown more than other sectors and reminds firms that weak oversight of ARs could risk principals failing in their Consumer Duty obligations.
As one of the principal firms with the largest number of ARs, ITC has a good and constructive working relationship with the FCA helping to represent your interests and ensure that customers get good outcomes.