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The FCA (Financial Conduct Authority) Investigation into motor finance company Lookers
By Jamie Scott
Lookers - Mis Sold Car Finance
The FCA has announced it will be carrying out a formal investigating into Lookers, who are one of the UK’s leading car dealer groups. The investigation will focus on activities relating to its sales process between 2016 and 2019.
The Lookers board in their 2018 annual report and accounts, uncovered ‘Certain matters requiring review’ which led to a commissioned independent review in December 2018 which was shared with the FCA.
In a statement by Lookers, they confirmed that this revealed there were some control issues in the sales process in the groups regulated activities which required attention.
Lookers said “We have invested in both our internal capabilities and external advice. The project will be completed and agreed actions will be implemented as soon as possible,”
Lookers was informed by the FCA that as a result of its own review, it intended to carry out an investigation into the companies sales process between 01 January to 13 June 2019.
Lookers have said “The FCA investigation is newly commenced and no findings have been made"
“The FCA will reach its conclusions in due course and at this stage, the company cannot estimate what effect, if any, the outcome of this investigation may have. The Company is co-operating fully with the FCA in relation to this and will update the market further when appropriate,” the business said in its release.
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The FCA's Motor Finance Review
In march the FCA released its motor finance review: Click here for PDF
As part of the long awaited report into the motor finance sector, the Financial Conduct Authority (FCA) highlighted it main cancers were commission models that could result in market intervention.
The FCA found that Increasing Difference In Charges (DiC) and Reducing DiC commission arrangements provided strong incentives for brokers to arrange finance at higher interest rates.
Other commission structures provide a weaker link / none at all to the interest rate, the FCA found.
The FCA are now evaluating options to interpose within the market to address the expected harm that have been identified. This means FCA rules or other steps such as limiting broker discretion could be strengthened.
- Find out more information about the FCA.
- For more information contact the FCA press office on 02070663232.
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