New guidance from the Financial Conduct Authority covers users of credit cards and other revolving credit, personal loans, motor finance, buy-now pay-later (BNPL), rent-to-own (RTO), pawnbroking and high-cost short-term credit (HCSTC) products and overdrafts.
The FCA's January deadline is only a few months away and more uniform processes and disclosures may prove to be a much more difficult task than first imagined. Lenders have different commission models across their product ranges and as such the ‘nature’ of these, to use an FCA term, needs to be disclosed against each of them.
FCA proposes that customers buying a policy online should be charged the same price as a new customer buying online. Firms would be free to set new business prices, but they would be prevented from gradually increasing the renewal price to consumers over time (known as 'price walking') other than in line with changes in customers’ risk.
Quotevine Chief Executive Daniel Layne said some concerns remain over areas of the ban, and more clarity is needed – including specific definitions around which vehicles it applies to – as well as the potential for unintended consequences such as dealers exploiting the loophole left by excluding personal contract hire (PCH) from the changes, in order to make up lost revenue.
Authority says preventing the use of this type of commission would remove the financial incentive for brokers to increase the interest rate that a customer pays and give lenders more control over the prices customers pay for their motor finance.
The functions required to run your business – email, browsing, cloud, WiFi, software, hardware – are all vulnerable to attack, leaving you exposed to viruses, data breaches, loss of data and loss of connectivity.
There is concern that borrowers could face a negative equity situation at contract maturity, according to global credit ratings business DBRS Morningstar.
Authority has already confirmed a package of targeted temporary measures to help people with some of the most commonly used consumer credit products.