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A legal expert has warned auto finance houses to double-check their consumer loan affordability assessments to ensure they are “robust and appropriate”.
Partner and Head of Financial Services at national law firm Freeths, Adam Edwards said FCA Amigo’s criticism was a warning to lenders.
Amigo was criticized by the FCA for failing to carry out adequate affordability checks on borrowers and guarantors.
It narrowly missed out on a £73 million fine because imposing it would have threatened its ability to meet consumer damages commitments under the Regulatory Scheme.
“The Financial Conduct Authority’s public condemnation of Amigo should cause lenders to double-check their affordability assessments to ensure they are sound and appropriate.
“Due to the current cost of living crisis and in preparation for implementing consumer duties, we anticipate affordability assessments to be in the spotlight of regulators throughout this year.
“As such, now is the time to do a full assessment of the arrangements you have,” he said.
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