The UK’s monetary regulator has warned motor finance corporations to carry again money because it continues an investigation into the sector.
The Monetary Conduct Authority (FCA) additionally revealed that many corporations “are struggling to promptly present the information we want” for the probe.
Earlier this 12 months, the regulator launched a evaluation into whether or not folks could possibly be owed compensation for being charged an excessive amount of for automotive loans, following a excessive variety of complaints.
The ombudsman service mentioned in January it had heard from greater than 10,000 individuals who worry they had been charged an excessive amount of for his or her finance and instructed it would look to safe settlements if it finds widespread misconduct.
In an replace on Friday, the regulator mentioned it’s progressing with the evaluation however highlighted some points in securing crucial data from corporations.
“Corporations concerned in our evaluation have engaged with us constructively,” the FCA mentioned.
“Nevertheless, many corporations are struggling to promptly present the information we want.
“Causes for this embody information being saved on a number of programs and/or being unfold between lenders and brokers.
“In some older instances, corporations haven’t retained all related data.”
The watchdog has written to corporations concerned within the investigation to name on them to adequately have interaction with the method and guarantee they’ve funds wanted.
“We count on you to undertake an evaluation of whether or not your agency’s monetary sources are ample,” the FCA informed corporations within the letter.
The size of potential settlements over the problem stays unknown, however shopper champion Martin Lewis mentioned automotive finance mis-selling has the potential to be the “second-biggest reclaim payout in UK historical past” after the PPI scandal.
UK banks have already confirmed they’ve put aside a major funding to doubtlessly tackle the problem, with Lloyds Group telling shareholders they’ve a provision value £450 million to cowl potential prices.
Within the replace, the FCA additionally confirmed that Barclays financial institution has launching a judicial evaluation enchantment towards the Monetary Ombudsman Service judgment which sparked the FCA evaluation course of.
The FCA mentioned it would set out its subsequent steps within the evaluation course of by September 24 on the newest.
