a post by Colin Read (Pinsent Masons) for the Out-Law.com blog
Banks and insurers could be exposed to the same type of risks that have emerged from the payment protection insurance (PPI) scandal because of the way 'personal contract purchases' (PCPs) are sold to car buyers.
UK regulators are looking closely at the sale and use of PCPs. A report due out before the end of next month from the Financial Conduct Authority (FCA) is likely to offer greater clarity on its views on the fairness of the arrangements to consumers.
While regulatory developments are still in their early stages, there is real potential for PCP contracts to develop into a major regulatory issue affecting the lenders that support the financing arrangements provided for PCPs and the FCA-regulated businesses which do the front line selling.
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