Volkswagen Finance £5.4m FCA Fine for failing to treat its customers in financial difficulty fairly.

The FCA has fined Volkswagen Financial Services (UK) Limited (Volkswagen Finance) £5,397,600 for failing to treat its customers in financial difficulty fairly.

The failings were identified through the FCA’s Borrowers in Financial Difficulty (BiFD)

Borrowers in Financial Difficulty (BiFD)

• The Financial Conduct Authority (FCA) launched the Borrowers in Financial Difficulty (BiFD) project in March 2021 to ensure firms continue to support borrowers facing financial challenges.
• This initiative covers a range of retail lending products, including mortgages, personal loans, credit cards, and overdrafts.
• The BiFD project aims to help firms provide appropriate forbearance and support to customers, especially those affected by the economic impact of the pandemic.
• The FCA has set out clear expectations for firms, such as offering tailored support, recognizing vulnerable customers, and ensuring staff are adequately trained
• In April 2024, the FCA confirmed new rules to strengthen protections for borrowers in financial difficulty, building on the Tailored Support Guidance (TSG) introduced during the pandemic.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, commented on the fine:

• "For many, a car is not nice but necessary for work or family life.
• Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need.
• It is right it compensates those who suffered.
• This fine and redress should send clear signals to lenders that they need to properly support those in financial difficulty."

The FCA commented on the following areas:-

• Treatment of vulnerable customers
• Forbearance
• Termination and repossession
• Customer communications
• Complaints
• Policies and procedures

FCA fines Volkswagen Finance £5.4m over treatment of customers in financial difficulty | FCA

• https://www.fca.org.uk/news/press-releases/fca-fines-volkswagen-finance-over-treatment-customers-financial-difficulty?utm_medium=email&_hsenc=p2ANqtz-9syu0eY8D1up8tLGlBuUMNJ-4oUd12nRgAcUCscF0T6kWfFfj7KSqHPrkLEQreKOjZrPz4xZWxdW9WyWrqEyA_PyC5A7QsfjB6dSLnj0kQTRHdstE&_hsmi=331188191&utm_content=331188191&utm_source=hs_email
• Borrowers in financial difficulty (BiFD) project – supporting those .... https://www.fca.org.uk/firms/borrowers-financial-difficulty-project.
• FCA updates on borrowers in financial difficulty | FIN.. https://www.financialinstitutionsnews.com/2022/01/19/fca-updates-on-borrowers-in-financial-difficulty/.
• PS24/2: Strengthening protections for borrowers in financial difficulty .... https://www.fca.org.uk/publications/policy-statements/ps24-2-strengthening-protections-borrowers-financial-difficulty.