Quick Action by the FCA Results in 500,000 People Wiping Off their Loans

December 11th, 2019

Around 500,000 people across the UK have been saved from overpaying car finance loans and payday loans thanks to quick action by the Financial Conduct Authority (FCA). The watchdog found proof of unfair practices by Motormile Finance UK, the company that is charged with poor treatment of consumers and their finances.

The FCA has asked Motormile Finance UK, which also trades as MMF, MMF Debt Purchase and MMF UK, to write off the £414m of customer’s debt as the company failed to verify that the sum of money owed was correct. This was leading to unfair and unsuitable customer contact for recovery of those sums. This in turn affected around 500,000 people and now the FCA has taken the responsibility of writing off loans under the redress programme. The debt is expected to run into hundreds of pounds per person.

An arrangement of repayment would be made for the cases where the customers have started making payments to Motormile. As of now, a total of £154,000 is being repaid to 2,148 people, which takes the average to about £72 per person. Consumers have also given proofs of how the company was being unfair and sending emails about doorstep collections.

The FCA authorities have said that “We have agreed this package, and previous action, to protect the customers of Motormile from unfair practices. We have worked closely with Motormile, and are now satisfied with their progress and the way that they will address their previous mistakes.” The FCA authorised the company in August 2016 after finding that the necessary changes were made by the firm.

A spokesperson from the company gave a statement showing regret and said that “We apologies to all affected customers and are delighted that we are able to address the issues through the redress scheme we have agreed with the FCA. MMF are now fully authorised by the FCA, which is testament to them witnessing first-hand the serious approach we take to our regulatory responsibilities and our desire to treat customers fairly. We will strive to build on the excellent reputation we have in the market and continue to put customers first in everything we do.”

Customers need not take any action as Motormile would contact all those who have been affected due to its mismanagement by February 2017.

For more of such news and quick updates, you can check our website Freepricecompare.com or feel free to call our friendly team of finance market experts on 02034757476.


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