Key Facts:
- Fine: £2.7m
- Compensation: £30.3m
- Firm’s Activity: a lender providing motor finance for used vehicles to ‘non-standard’ customers who cannot access finance from mainstream lenders due to poor/ no credit history.
- Firm Fined: MoneyBarn (part of
- Source: Enforcement Case link.
- Rules Breached: Principle 6 (Customer Interests), Principle 7 (Communication with Client).
What went wrong?
Poor treatment of and communication with customers that fall into financial difficulties, i.e. the exercise and communication of appropriate forbearance by the lender. Here we seek to tease out the implications of this case for FCA regulated business more generally.
Lessons Learnt
- Policy design: Ensure policies cover the appropriate ground, from articulating the appropriate range of options (in this case, for forbearance), the considerations that should be taken into account and the governance that would apply to different options.
- Policy Implementation: policies are appropriately implemented and their implementation can be evidenced.
- Monitoring and assurance: regularly test the controls, particularly around the assessment of customers’ situation and the outcomes. If the same approach to forbearance tends to be offered that is not likely to evidence consideration of customer needs
- Regulatory relationship management: The engagement with the FCA on the case went through a number of escalations. A proactive approach to regulatory concerns from the beginning can avoid those escalations and be cost-effective in the long term.
If you are looking for support or just want to speak to someone on the team about what to consider with respect to this fine, you can get in touch at team@regnut.com
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