Clear, upfront disclosure of commission to ensure informed consent will be critical for providers of motor finance following last week’s shock Court of Appeal decision which saw several major industry names suspend lending in order to take stock of the implications of the ruling.
Speaking at an Auto Trader webinar, industry experts discussed how lenders, brokers and retailers now need to improve disclosure statements to ensure clarity in the wake of the ruling which many view as changing the current regulatory framework under which they operate.
The Financial Conduct Authority (FCA) has not mandated disclosure of the specific commission or remuneration payable to intermediaries in the consumer credit market unlike in other sectors such as mortgages and investment advice – but the Court of Appeal decision in Johnson v FirstRand Bank Ltd, Wrench v FirstRand Bank Ltd and Hopcraft v Close Brothers Ltd now appears to essentially impose that standard through the common law.
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