Citizens Advice Scotland had yesterday welcomed the announcement by the Financial Conduct Authority (FCA) to ban the way some car dealers receive commission linked to the interest rate consumers pay.
Preventing this type of commission would stop car dealers and other motor finance brokers from increasing customers’ interest rates for their own financial gain, a change the FCA estimates could save £165 million a year.
Citizens Advice Scotland’s Financial Health spokesperson, Myles Fitt, said:
“The fact that some car dealers increase consumers’ interest rates just so they themselves can benefit from a commission bump is outrageous.
“As motor finance options are on the up through schemes like contract purchases this is the time to make sure consumers are adequately protected against these conflicts of interests.
“As Scotland’s consumer champion, Citizens Advice Scotland welcomes the steps being taken by the FCA. They will ultimately create greater transparency for consumers, encourage more competition in the market and make sure consumers get a fairer deal when buying a car.”