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FCA fines Moneybarn ?2.77m over unfair lending practices

By Caoimhe Toman

Date: Monday 17 Feb 2020

FCA fines Moneybarn ?2.77m over unfair lending practices

(Sharecast News) - The Financial Conduct Authority (FCA) imposed a fine of ?2.77m on car finance provider, Moneybarn for unfair lending practices.


The FCA deemed the Provident Financial subsidiary did not treat customers fairly when they fell behind with loan repayments while in financial difficulties, between 1 April 2014 and 4 October 2017.

Around 1,400 customers were defaulted after entering unsustainable short-term repayment plans.

Moneybarn also did not communicate the likely financial consequences of failing to keep up with payments to customers in a way which was clear, fair and not misleading.

Moneybarn worked collaboratively with the FCA during the investigation, accepted its findings and volunteered to provide redress of over ?30m to all 5,933 potentially affected. Otherwise, the FCA would have imposed a financial penalty of at least ?3,963,500.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: "The FCA gave Moneybarn significant credit for this in assessing the size of the penalty imposed."

Shares in Provident Financial were 2.1% lower in London on Monday at 459.17 pence each. The company managed to fend off a hostile takeover bid from Non-Standard Finance in 2019 and saw the year's profits in line with what was expected last week when it published results.

The company also said it had agreed a bilateral securitisation facility with NatWest Markets to fund Moneybarn business flows. The new facility provides up to ?100m of initial funding and is expected to grow to ?275m over the next 18 months.

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