PCP misselling.
Discussion
Ginge R said:
In the context of further investigating, which is right that they do.Ginge R said:
The FCA were already involved as it forms part of their overall review of consumer debt which has been running for over a year now. However, this comment from the article sums up the abject incompetence of a regulator that is staffed by people who simply are not only not up to scratch but who consistently are found asleep at the wheel and always having to regulate retrospectively:
'Andrew Bailey, the chief executive of the Financial Conduct Authority, said the FCA wanted to understand what was going on in the car finance market. “What’s going on here? Does it mean there are more cars or [is it that] the form of financing has changed? I think it’s something to do with the latter rather then the former,” he said.
The FCA should never be asking 'what's going on here?' They are the regulator that sets the rules and sole job is to ensure that the firms who pay the FCA to regulate then act by those rules. It is there job to ensure that new products and industry evolutions remain compliant.
The fact that the head of the FCA so casually speaks of his organisation not knowing what has been going on and having to launch yet another enquiry into something it was their job to be regulating shows how endemic this issue is within our regulator.
What they will do now is almost certainly what they always do, they will go and hire at huge daily rates a team of supposed consultants to draw up the paper but these people will be known industry incompetents who have ceased being able to find suitable employment in the industry for their age due to lack of ability. These people will then do what their type has been doing at the FCA for the last 16 years or so and just look at what other regulators are doing and copy their homework.
The job of the regulator is to know exactly what is going on in any market that it regulates at any given time. It's job is not to sit there doing nothing until journalists' articles finally get attention from politicians who then finally ask the FCA to wake up and have a look at something as part of a massive back covering, retrospective operation.
Gordon Brown and his 'light touch regulation' may have left office a decade ago but the FCA never got the memo that their job was to actually regulate the firms and activities under their remit not to sit there doing nothing until bigger parties wake them up.
DonkeyApple said:
The FCA were already involved as it forms part of their overall review of consumer debt which has been running for over a year now.
However, this comment from the article sums up the abject incompetence of a regulator that is staffed by people who simply are not only not up to scratch but who consistently are found asleep at the wheel and always having to regulate retrospectively:
'Andrew Bailey, the chief executive of the Financial Conduct Authority, said the FCA wanted to understand what was going on in the car finance market. “What’s going on here? Does it mean there are more cars or [is it that] the form of financing has changed? I think it’s something to do with the latter rather then the former,” he said.
The FCA should never be asking 'what's going on here?' They are the regulator that sets the rules and sole job is to ensure that the firms who pay the FCA to regulate then act by those rules. It is there job to ensure that new products and industry evolutions remain compliant.
The fact that the head of the FCA so casually speaks of his organisation not knowing what has been going on and having to launch yet another enquiry into something it was their job to be regulating shows how endemic this issue is within our regulator.
What they will do now is almost certainly what they always do, they will go and hire at huge daily rates a team of supposed consultants to draw up the paper but these people will be known industry incompetents who have ceased being able to find suitable employment in the industry for their age due to lack of ability. These people will then do what their type has been doing at the FCA for the last 16 years or so and just look at what other regulators are doing and copy their homework.
The job of the regulator is to know exactly what is going on in any market that it regulates at any given time. It's job is not to sit there doing nothing until journalists' articles finally get attention from politicians who then finally ask the FCA to wake up and have a look at something as part of a massive back covering, retrospective operation.
Gordon Brown and his 'light touch regulation' may have left office a decade ago but the FCA never got the memo that their job was to actually regulate the firms and activities under their remit not to sit there doing nothing until bigger parties wake them up.
I had read the article and i was surprised by their lax approach and language. I thought for the Head of the FCA to be showing they clearly didnt have a grip on whats happening in such a large market was disturbing...However, this comment from the article sums up the abject incompetence of a regulator that is staffed by people who simply are not only not up to scratch but who consistently are found asleep at the wheel and always having to regulate retrospectively:
'Andrew Bailey, the chief executive of the Financial Conduct Authority, said the FCA wanted to understand what was going on in the car finance market. “What’s going on here? Does it mean there are more cars or [is it that] the form of financing has changed? I think it’s something to do with the latter rather then the former,” he said.
The FCA should never be asking 'what's going on here?' They are the regulator that sets the rules and sole job is to ensure that the firms who pay the FCA to regulate then act by those rules. It is there job to ensure that new products and industry evolutions remain compliant.
The fact that the head of the FCA so casually speaks of his organisation not knowing what has been going on and having to launch yet another enquiry into something it was their job to be regulating shows how endemic this issue is within our regulator.
What they will do now is almost certainly what they always do, they will go and hire at huge daily rates a team of supposed consultants to draw up the paper but these people will be known industry incompetents who have ceased being able to find suitable employment in the industry for their age due to lack of ability. These people will then do what their type has been doing at the FCA for the last 16 years or so and just look at what other regulators are doing and copy their homework.
The job of the regulator is to know exactly what is going on in any market that it regulates at any given time. It's job is not to sit there doing nothing until journalists' articles finally get attention from politicians who then finally ask the FCA to wake up and have a look at something as part of a massive back covering, retrospective operation.
Gordon Brown and his 'light touch regulation' may have left office a decade ago but the FCA never got the memo that their job was to actually regulate the firms and activities under their remit not to sit there doing nothing until bigger parties wake them up.
Phrases like "What’s going on here?", "I think it’s something to do with...." and "Bailey said his “hunch” was the market had undergone a structural change" dont exactly inspire me with confidence
Leaving aside the legal stuff PCP is essentially car rental rather than car purchase.
As with all rental contracts, the biggest risk for the rental company is that people stop renting and they're left with a big pile of used cars they can't sell. I guess the main question is whether that real-world risk is properly reflected in the company's/lender's accounts.
As with all rental contracts, the biggest risk for the rental company is that people stop renting and they're left with a big pile of used cars they can't sell. I guess the main question is whether that real-world risk is properly reflected in the company's/lender's accounts.
rockin said:
Leaving aside the legal stuff PCP is essentially car rental rather than car purchase.
As with all rental contracts, the biggest risk for the rental company is that people stop renting and they're left with a big pile of used cars they can't sell. I guess the main question is whether that real-world risk is properly reflected in the company's/lender's accounts.
And this is why CP is an Operating Lease...despite what is said elsewhere.As with all rental contracts, the biggest risk for the rental company is that people stop renting and they're left with a big pile of used cars they can't sell. I guess the main question is whether that real-world risk is properly reflected in the company's/lender's accounts.
As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
CaptainSlow said:
And this is why CP is an Operating Lease...despite what is said elsewhere.
As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
But the requirements/criteria they must conform to are laid out by the regulator who almost certainly have little clue as to what has been occurring in this sector over the last decade and is extremely unlikely to have therefor set suitable criteria. As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
DonkeyApple said:
The job of the regulator is to know exactly what is going on in any market that it regulates at any given time. It's job is not to sit there doing nothing until journalists' articles finally get attention from politicians who then finally ask the FCA to wake up and have a look at something as part of a massive back covering, retrospective operation.
Genuine questions: Is it the job of the FCA to understand the way the entire retail car market works? Shouldn't they just be concerned with fairness (in its broadest sense) to consumers in the way that financial products are used/sold?
Sheepshanks said:
Genuine questions: Is it the job of the FCA to understand the way the entire retail car market works?
Shouldn't they just be concerned with fairness (in its broadest sense) to consumers in the way that financial products are used/sold?
You're quite right. Their whole existence is to regulate individuals and companies who offer any form of financial activity, be it car finance / loans / savings etc. More details here. https://www.fca.org.uk/about/the-fcaShouldn't they just be concerned with fairness (in its broadest sense) to consumers in the way that financial products are used/sold?
They are considerably more thorough than the previous body, the FSA as far as regulating companies is concerned. While we've been trading for 25 years as a car finance and leasing brokerage, we still had to write up a 65 page business plan in order to receive our new licence. All staff members have to undertake tests annual to ensure we are competent.
The ethos of the FCA is to ensure that customers are treated fairly. They won't know the in & outs of every specific business where finance is concerned (although the car finance market is huge.)
Sheepshanks said:
Genuine questions: Is it the job of the FCA to understand the way the entire retail car market works?
Shouldn't they just be concerned with fairness (in its broadest sense) to consumers in the way that financial products are used/sold?
Their concern is purely with the financial products being sold to consumers. All products are regulated as are all persons selling them. As such the FCA has an absolute obligation to ensure that they are actively regulating such products and activities at all times. Shouldn't they just be concerned with fairness (in its broadest sense) to consumers in the way that financial products are used/sold?
They cannot possibly regulate what they do not know and so must keep fully up to speed with all new financial products and activities and ensure at all times that the firms under their remit are operating within a fair interpretation of the guidelines and that most importantly those guidelines are relevant and up to date.
Very clearly if you are just sitting there doing absolutely nothing for a decade then you cannot have guidelines that are relevant or up to date and your regulation ceases to be competent.
Financial products change and evolve very rapidly and the FCA is obviously fully aware of how we are constantly moving our product offerings forward to ensure our profits are maximised and so they have absolutely no excuse to not know at any given moment in time how a product works and who it is being sold to and by whom.
In reality it is nothing like that though. Even when a firm is in clear breach its peers can repeatedly inform the regulator of what is occurring but will simply be ignored. In my side of the market we repeatedly informed the FCA of clear breaches of AML and KYC of a firm but they chose to ignore for 8 years until the German regulator kicked off about the firm, then the French and finally our Govt asked the FCA what their view was and they suddenly felt obliged to do their job. At which point they didn't have anyone on their books who fully understood our industry and ended up hiring a series of idiots that we had long since tinned for being unable to understand our market.
The fact that the head of the FCA feels absolutely comfortable to openly state that he hasn't got a scooby what is going on (bearing in mind he wouldn't have spoken with the media until being briefed by those supposedly responsible) pretty much sums up their total incompetence at regulation. All they do is sit around colon tickling each other waiting for directives from mainland Europe.
If we do end up with a retail credit crisis it will 100% be the fault of the laisez faire FCA and their lack of both enforcing the existing regulation and ensuring that this regulation remained current. But in reality the firms will carry the can and foot the bill while the tools in the FCA collect their knighthoods.
DonkeyApple said:
CaptainSlow said:
And this is why CP is an Operating Lease...despite what is said elsewhere.
As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
But the requirements/criteria they must conform to are laid out by the regulator who almost certainly have little clue as to what has been occurring in this sector over the last decade and is extremely unlikely to have therefor set suitable criteria. As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
CaptainSlow said:
DonkeyApple said:
CaptainSlow said:
And this is why CP is an Operating Lease...despite what is said elsewhere.
As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
But the requirements/criteria they must conform to are laid out by the regulator who almost certainly have little clue as to what has been occurring in this sector over the last decade and is extremely unlikely to have therefor set suitable criteria. As for your point, Lessors need to do an impairment review on at least an annual basis and any forecasted losses on resale and/or maintenance contracts need to be built into their accounts.
Soov330e said:
NO ONE got mis-sold.
The contracts are VERY VERY CLEAR.
You lay down some money, you make the cheap payments, you limit your mileage to what you said, and at the end you either pay the final payment and keep the car, or you hand it back.
Anyone claiming that they didn't know what they were getting into here is an idiot or after compensation for no reason.
I don't think it's quite as clear cut that that Soovs always.The contracts are VERY VERY CLEAR.
You lay down some money, you make the cheap payments, you limit your mileage to what you said, and at the end you either pay the final payment and keep the car, or you hand it back.
Anyone claiming that they didn't know what they were getting into here is an idiot or after compensation for no reason.
I've uncovered numerous people who have all been sold a "PCP" that actually isn't.
Volvo and Santander seem to be the main culprit: https://www.santanderconsumer.co.uk/finance-that-f...
They look like a PCP to most, sound like a PCP to most, but give no VT rights.
Mattt said:
Soov330e said:
NO ONE got mis-sold.
The contracts are VERY VERY CLEAR.
You lay down some money, you make the cheap payments, you limit your mileage to what you said, and at the end you either pay the final payment and keep the car, or you hand it back.
Anyone claiming that they didn't know what they were getting into here is an idiot or after compensation for no reason.
I don't think it's quite as clear cut that that Soovs always.The contracts are VERY VERY CLEAR.
You lay down some money, you make the cheap payments, you limit your mileage to what you said, and at the end you either pay the final payment and keep the car, or you hand it back.
Anyone claiming that they didn't know what they were getting into here is an idiot or after compensation for no reason.
I've uncovered numerous people who have all been sold a "PCP" that actually isn't.
Volvo and Santander seem to be the main culprit: https://www.santanderconsumer.co.uk/finance-that-f...
They look like a PCP to most, sound like a PCP to most, but give no VT rights.
Also people really shouldnt be going in to a PCP arrangement with a VT as their exit strategy.
essayer said:
This is my favourite
http://www.ombudsman-decisions.org.uk/viewPDF.aspx...
The FCA are not the FOS.http://www.ombudsman-decisions.org.uk/viewPDF.aspx...
Although the specifics highlighted in the US are probably not what I was thinking of when I started looking more closely at this (malpractice on such a determined wide-scale at dealers for instance - our various codes of practice and areas of consumer legislation seem to be tighter), there are some areas that might overlap.
https://www.bloomberg.com/news/articles/2017-07-17...
https://www.bloomberg.com/news/articles/2017-07-17...
Not quite sure how relevant this is, however it would appear that recently VWFS has started to charge their ex customers, excess mileage fees when they VT their contracts. I see from the earlier post that the ombudsman has ruled against this being unfair, however the contract states you pay 50% of the balance and no more.. I can only assume an influx of VT due to the emissions scandal..
The mis-selling part of this has been salesman potentially encouraging low mileage PA to keep monthly payments down, knowing that there was no re-course after the VT.
I would be interested to know whether any precedents have been set in taking legal action for excess fees, whether it was for or against the consumer?
G
The mis-selling part of this has been salesman potentially encouraging low mileage PA to keep monthly payments down, knowing that there was no re-course after the VT.
I would be interested to know whether any precedents have been set in taking legal action for excess fees, whether it was for or against the consumer?
G
Edited by Gio G on Tuesday 18th July 09:57
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