Motormile Finance (MMF) has agreed to pay customers £154,000 in redress and write off hundreds of millions worth of debt due to failures in its due diligence and collections process, according to the Financial Conduct Authority (FCA).
The British debt purchase and collections company entered an agreement with the regulator after being told it had inadequate systems and controls over due diligence.
As a result, MMF will provide £154,000 worth of cash payments to customers, and write off £414m of debt where evidence is insufficient.
The FCA began reviewing MMF’s loan porfolios and collections processes in February 2015, prompting the group to amend its practices in response to the risks identified.
Jonathan Davidson, director of supervision – retail and authorisations at the FCA said: “We have agreed this package, and previous action, to protect the customers of Motormile from unfair practices.”
The FCA authorised MMF in August 2016 after being satisfied that changes implemented would maintain compliant standards.
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Davidson added: “We have worked closely with Motormile, and are now satisfied with their progress and the way that they will address their previous mistakes.
“This evidences the importance of conducting sufficient due diligence and how failing to do so leads to poor treatment of customers.”