ZDK to crack down on financial commission

car Cars on busy road Commission schemes at some retailers and brokers found motivated selling at higher interest rates

Car finance sales are undergoing a crackdown after a financial regulator in the UK revealed that it uncovered unfair practices among retailers and brokers in the way they make commission on sales.

A report released today by the Financial Conduct Authority (FCA) showed that some earning sellers have arranged a commission on the interest rate at which they sold the car, with more bonuses for more to charge customers.

“We have seen evidence that customers are being lost because of the way in which some lenders will reward those who sell the financing motor,” said Christopher Woolard, executive director of strategy and competition at UKF.

“By banning this type of commission, we believe we will see increased competition in the marketplace that ultimately saves customers money.”

TSF now proposes to introduce a fixed commission, and not tie it to the interest rate at which it is sold. He says the move could save drivers around £165m a year.

In addition, ZDK is looking to make sure that all credit fees - including those outside the auto industry - are more transparently described to customers in order to give buyers more information.

The TSF will consult on the proposed new rules before 15 January 2020 before implementing them at some point during the year.

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