Over 5,933 customers were potentially mistreated by Moneybarn between 2014 and 2017. Now, the car finance provider has been hit with £2.77m fine as a result.
The Financial Conduct Authority (FCA) imposed the fine after it found that Moneybarn had not treated customers fairly when they fell behind with loan repayments while in financial difficulties. The period measured was between 1 April 2014 and 4 October 2017.
Moneybarn was also criticised for failing to explain the consequences of not keeping up with payments to customers accurately and without being misleading.
Over 1,400 customers defaulted by entering into unsustainable short-term repayment plans.
After speaking with the financial watchdog, Moneybarn has voluntarily provided redress of more than £30m to all 5,933 customers potentially affected by these failings without requiring them to demonstrate that they have suffered any financial detriment.
“Moneybarn did not give its customers, many of whom were vulnerable, the chance to clear their arrears over a realistic and sustainable period,” said Mark Steward, executive director of enforcement and market oversight at the FCA. “It also did not communicate clearly to customers, in financial difficulty, their options for exiting their loans and the associated financial implications, resulting in many incurring higher termination costs. These were serious breaches.”
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