March 4, 2019 / 7:27 AM / in 3 months

UK watchdog may ban some practices in car finance market

LONDON, March 4 (Reuters) - Britain’s markets watchdog said it may ban some methods used by lenders to reward car retailers that end up costing consumers 300 million pounds a year.

The Financial Conduct Authority said it found that widespread use of commission models that allow brokers discretion to set the customer interest rate and thus earn higher commission.

“This can lead to customers paying significantly more for their motor finance,” the FCA said in a statement on Monday.

The watchdog said it was assessing options for intervening in the market, which could include strengthening existing FCA rules, banning certain types of commission model, or limiting broker discretion. (Reporting by Huw Jones; Editing by Toby Chopra)

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