The FCA has announced its intention of banning discretionary commission models for motor finance brokers. The Regulator said it had reached the view that brokers’ effective ability to set the interest rate paid by customers (a rate to which their own commissions are linked) created an incentive for them to act against customers’ best interests.
The ban is now set to come into effect on 28 January next year, saving consumers a estimate £165m per year. Changes to the way brokers are required to disclose commissions come into effect from the same date. It’s important to note that these changes to disclosure requirements apply to ALL credit brokers, not just those selling motor finance.
For further information or help with any of the issues raised above call us on 01925 765777 to speak to one of our compliance experts, or email info@ukgigroup.com.