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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Financial regulators have issued Volkswagen Finance, the motor lending arm of the car manufacturer, with a £5.4mn fine for failing to treat customers in financial difficulty fairly.

The Financial Conduct Authority on Monday said that between 2017 and 2023, the company had failed to understand borrowers’ circumstances and support them accordingly. It added that Volkswagen Finance had agreed to pay more than £21.5mn in redress to about 110,000 customers who may have suffered harm because of those failings.

The lender had taken cars away from some vulnerable customers without appropriately considering other options, the FCA said, risking “people being put in a worse position, particularly if they relied on their car to travel to work”.

The watchdog said the lender had made “limited, if any, attempts to call customers before taking their car away” and did not entertain forbearance including when customers had made reasonable offers to pay arrears.

“For many, a car is not a nice to have but a necessity for work or for family life,” said Therese Chambers, joint executive director of enforcement and market oversight. “Volkswagen Finance made tough personal situations worse by failing to consider what those in difficulty might need.”

Volkswagen Finance’s failings were “compounded by poor templated and automated communications”, said the FCA. The findings resulted in the lender setting up a redress scheme to compensate customers and introducing a new debt collection model.

In one instance, the lender sent “correspondence that [a borrower] considered to be threatening” just two weeks after he told the company that he had recently tried to take his own life, according to a case study set out by the FCA. An agent he spoke with displayed “a lack of empathy” through sarcastic remarks, while it took 11 months to formally flag him internally as a vulnerable customer, the watchdog said.

Volkswagen Finance said it had made “significant adjustments” in recent years to improve its service.

“We are in the process of concluding our remediation efforts as we continue to provide goodwill payments to affected customers and apologise for any detriment caused.”

The fine, which follows a wider review of lender’s treatment of borrowers in difficulty, comes as the financial watchdog is also investigating the potential mis-selling of historic car finance loans. The FCA is probing a practice banned in 2021 that allowed car dealers to set their own interest rate on repayment plans.

Volkswagen Finance is one of the UK’s largest motor finance providers, lending to buyers of a range of motor brands including Volkswagen, Škoda and Porsche. 

The Financial Conduct Authority’s recent letter to advice firms has certainly got people talking with its specific mention of consolidators and its desire to gather data from them.

The FCA specifically said consolidators are expected to “ensure the delivery of good outcomes is central to your culture”. That should come naturally to any business operating in this area. But, in addition, their “leadership, governance, oversight arrangements and controls should be effective, adequately resourced and commensurate with your growing size and complexity”.

That second part is the bit where appropriate systems need to be put in place to make sure there is genuine oversight. There can be no true leadership or governance among a number of firms spread throughout the country without a central place to collate and analyse data.

They need to analyse all the important pieces of information, whether that’s client reports, investment data or where advisers and paraplanners are spending their time.

I speak to a lot of consolidators, whether it’s those running the businesses or the owners at the private equity houses, and this is often one of the trickiest parts for them: rationalising many businesses and finding a way to gather the right data in an orderly fashion.

Without this, it’s immensely difficult to implement the correct compliance controls and maintain consistent advice and investment processes.

In fact, it’s even difficult to report data the FCA is trying to gather without these systems in place. And don’t forget consolidators need to further scale all their processes as the business continues to grow and absorb more firms.

Consolidators can even take note of the regulator’s own data gathering and “data-led” approach.

The regulator has been pushing to change its culture and enforcement to a much more data-based approach. It’s invested resource and effort to do so, which should make its monitoring more efficient and effective.

To draw the parallel, the central point of acquiring multiple advice and investment management firms is to truly consolidate them. The endgame is to pull together multiple businesses and create efficiencies that work for all parties: the investors, the business and the clients can all be aligned.

That means cost savings that can be passed onto clients and better advice processes to create consistent outcomes for them, too. All together that means a better value proposition for clients and, hand-in-hand, it provides value for the consolidator and makes life easier for advice professionals.

Better data control and monitoring should hit all the right Consumer Duty notes: improved value for money, better consumer communication and support, and improved oversight that maintains consistency in the products and service provided.

This is exactly what the FCA is looking for. The regulator isn’t naive: it knows these large private equity firms are entering the market and spending big to make a profit on their investment.

But it wants to see consolidation that also provides the end client value: they’re the ones at the heart of the business. Value creation for the business certainly doesn’t have to be mutually exclusive from value creation for the end clients. At the end of the day, without them it’s all worth nothing.

The FCA knew gathering data was important in its own regard and has done the right things to make its processes more efficient and data centric. Consolidators can take a leaf out of the regulator’s book and make sure they focus on collecting and analysing the right information to provide value for both clients and the business.

Alex Cowan-Sanluis is chief executive of Platform One

A FAMILY of five have visited more than 20 countries in their motorhome, spending three months holidaying on the road every year.

Known as the Roaming Radfords, Steve and Lyndsay have been holidaying in a motorhome since 2007, when their eldest son Eddie was just a year old.

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The husband and wife team, who live in Milton Keynes, have been to France, Spain, Belgium, Italy, Germany, Denmark, Portugal, Sweden, Norway and Morocco in their motorhome.

Their most recent trip took them to Turkey, where they spent six weeks exploring the country with their three sons, Eddie, Harry and George.

Steve and Lyndsay document their adventures on their Youtube channel, the Roaming Radfords.

And with more than 17 years of experience, it’s safe to say they know how to travel on a budget.

Steve and Lyndsay told Sun Online Travel: “We consider ourselves quarter timers, so every year we spend at least three months of our lives in our motorhome.”

The family spends the entirety of the school summer holidays in their motorhome, using European car park schemes to keep pitch costs down.

Steve added: “It’s much easier to go ‘off-grid’ in Europe. For example, in France, there’s a system called aires where motorhomes can stay overnight in registered car parks.

“They’re not very caravan friendly, and you have to stay within your parking space, but they’re fantastic in terms of location and price.”

Holidaymakers can spend the night, or even the entire day, parked at an aires site, without spending a penny or very little.

Similar schemes operate in other European countries, including Stellplatz in Germany.

The Roaming Radfords use the inexpensive car parks after long days spent driving.

Steve said: “What you don’t want to do is drive until 9pm and then pay €50 for a campsite only to leave the next morning.”

While these car park schemes aren’t as common in the UK, Steve recommended spending the night in a pub car park.

He explained that pub landlords are often happy to exchange a free overnight car parking space for the price of a meal.

For a greater chance of success, the Radfords suggested parking motorhomes in the corner of the car park to keep the longer vehicles out of the way of other motorists.

Those holidaymakers who want to stay on campsites and have access to facilities can still travel on a budget.

Steve and Lyndsay recommended becoming a member of the Camping and Caravanning Club because holidaymakers can pay for pitches at members’ rates, which are cheaper.

Signing up for rallies is another way to keep pitch costs down too, with rallies held at rally fields at campsites.

The pair added: “You’ll get access to all the facilities but won’t have a specific pitch, so they’re cheaper weekends”.

Steve and Lyndsay also encouraged holidaymakers to cook their own meals and treat long trips as if they’re self-catering.

They added: “You’re in your motorhome/caravan, you’ve got everything you need to cook a delicious meal”.

Why caravan holidays are so underrated

CARAVAN park holidays are a British staple.

And with the cost of living crisis wreaking havoc on Britain’s purses, more of us are turning to them for an affordable break.

Josie O’Brien, Senior Digital Writer on Fabulous, weighs in on why she thinks caravan holidays are seriously underrated…

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WHEN I was a child, my mum used to collect the £9.50 holiday vouchers in The Sun.

She’d use them to book a couple of nights away at a caravan park during the school holidays.

As an adult, I fully appreciate the convenience of a humble caravan holiday.

No faffing about with passports, no luggage limits and no bog-standard hotel breakfast of stale toast and grey eggs. 

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I still love caravan holidays as an adult.

In a world of doing everything for the ‘gram, a caravan park brings you back to basics.

There’s no obligation to get dressed up, no stress to fit a million picturesque excursions in one week and I don’t find myself flustered in tourist hot spots like abroad. 

I love going to coastal caravan parks and strolling along the beach parade.

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My highlight is always fresh mussels, ice-creams and classic pubs to grab an afternoon tipple in. 

And then, of course, there’s the cost.

Staying in a caravan is definitely way cheaper than my international trips. 

With no expensive hotel bills and the ability to cook my own meals, I’m spending hundreds less than I would abroad.

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I’ve had some of my best and most relaxing holidays in caravans. Maybe I’ll buy my own one day.

Meanwhile, these are the top-rated holiday parks with on-site waterparks and pools.

And this holiday park has been named as one of the best in the country.

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A Spanish train maker that the Madrid government wants to keep out of the hands of a Hungarian consortium is in talks over a potential acquisition by a steelmaker from Spain.

Talgo, which was drawn into a political storm by a takeover bid backed by Hungary’s illiberal prime minister Viktor Orbán, said on Monday that it was negotiating with Sidenor, which is based in the Basque country.

In August, Spain’s government vetoed the €619mn Hungarian bid for Talgo on “public security and order” grounds, creating a new conflict between EU member states and Orbán’s Russia-friendly government.

The Spanish government had no immediate comment on the Sidenor talks. But when Sidenor first signalled its interest in Talgo last week, Carlos Cuerpo, Spain’s economy minister, said the government was ready to “accompany and help” Talgo find “a viable long-term solution”.

Talgo said that in its talks with Sidenor, it was “analysing a possible transaction that could involve the acquisition of a significant percentage of [Talgo’s] share capital or its entire share capital”.

The Hungarian consortium, known as Ganz-Mavag, has vowed to take legal action in Spain and at EU level “to defend the legitimacy” of its offer for Talgo. But there are signs that its interest in the acquisition is fading.

Spain has classified the documents explaining its veto and declined to comment on whether its concerns are linked to Orbán and his relationship with Russia, the closest of any western leader since Moscow’s full-scale invasion of Ukraine in 2022.

But a senior Spanish government official previously told the Financial Times that Madrid was concerned about the possibility of the Hungarian consortium acquiring train technology that Ukraine needs to strengthen its rail links with the EU.

The Ganz-Mavag consortium is 55 per cent owned by Hungarian trainmaker Magyar Vagon, with the other 45 per cent in the hands of Corvinus, a state-owned development finance institution that co-invests with Hungarian companies abroad.

In a sign of waning interest, the Hungarian state this month reduced Corvinus’s share capital, taking out a sum that was not far short of the entity’s planned contribution to the Talgo bid.

Talgo’s principal business problem is a lack of production capacity. It has been struggling to fulfil orders on time for new trains from clients including Deutsche Bahn and state-owned Spanish train operator Renfe.

Part of the Hungarian consortium’s pitch was that it could quickly increase Talgo’s factory capacity using the existing plants of Magyar Vagon.

As a steelmaker, Sidenor does not produce any trains itself and it is not clear how it would seek to alleviate Talgo’s production bottlenecks.

Eastern Europe is also a growing market for train sales. Last month Talgo president Carlos Palacio and the president of Polish rolling stock maker Pesa, Krzysztof Zdziarski, signed a preliminary deal for Talgo to provide its technology for high-speed trains in Poland.

Additional reporting by Raphael Minder in Warsaw

HOUSEHOLDS could save as much as £235 a year on broadband mobile and TV bills with an easy move.

Consumer brand Which? has found that switching your provider can save you some big cash.

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According to its research, on average, out-of-contract TV and broadband customers could save £160 by switching.

Sky customers surveyed saved most – a bumper £235 a year on average by switching to a better deal.

TV and broadband customers who haggled with their current provider rather than switching still saved £117 on average. 

Which?’s study also found there were decent savings for broadband-only customers who switched providers, with the average being £105.

Customers switching from BT, Sky or Virgin Media saved even more – up to £165 on average for VM customers.

Broadband customers who haggled saved £55 per year, with Virgin Media customers seeing the biggest average saving of £81. 

There was less of a difference in savings between mobile customers who switched and those who haggled.

Mobile customers at the end of their contract saved £67 on average by switching and those that haggled saved a slightly lower £61.  

Vodafone customers saved £146 by switching, more than twice the £67 average.

EE and O2 customers also saved an average of £122 and £132, respectively.

When it came to haggling, it was EE customers who stood to save the most, at £101 a year on average. 

Natalie Hitchins, Which? Head of Home Products and Services, said: “Our latest research shows out-of-contract broadband, TV and mobile customers can save a substantial amount of money by switching providers or haggling with their current one – and that most people find the process easy.

“With many telecoms providers already adopting Ofcom’s ban on unpredictable mid-contract price hikes before it officially comes into effect in January, consumers can more easily compare deals and should feel empowered to switch and potentially save hundreds of pounds.”

Results of the survey

The consumer champion surveyed more than 5,000 customers whose broadband, combined broadband and TV or mobile phone contracts had ended in the past 12 months, asking if they had switched or haggled, and how much they had saved on their bills in the process.

Which?’s research found that most consumers found the switching process easy.

This was the case for 75% of broadband, 73% of mobile customers, and 55% of broadband and TV customers. 

The survey found that price was the most common reason for switching.

But people also then benefitted from better customer service, faster download speeds and better connections.

Three in 10 broadband switchers said customer service was getting better after switching, while just 6% reported it getting worse.

For those who changed mobile networks, a third said customer service improved and three per cent said it got worse. 

For download speeds, nearly four in 10 broadband customers said they got faster after switching, versus one in eight who said they got slower.

For mobile network switchers, a quarter found they improved versus nine per cent who reported they got worse. 

Around four in 10 got a more reliable broadband connection after switching, while one in eight found it got worse.

Mobile network reception improved for half of the switchers but got worse for one in seven.

How to switch

Switching providers is far easier now because as of September, customers only need to contact their new provider to switch.

This makes it easier to move to a cheaper deal without your current provider trying to convince you to stay, even if you can find a better offer elsewhere.

Since 2015, people have been able to switch between phone and broadband providers on Openreach’s network – like BT and Sky – by letting their new provider handle the switch.

However, if you were switching to or from a different network, such as Virgin Media, which uses its own private network, you had to contact your existing provider to arrange the switch as well.

Ofcom‘s new “One Touch” rules, which started last month, have changed this.

Now, landline and broadband customers on any network only need to contact their new provider to make the switch.

Under the new rules, customers won’t have to pay notice-period charges beyond the switch date, so they will no longer be paying for the old service after the new one starts.

Plus, providers must also compensate customers if they experience issues with the switch or are left without service for more than one working day.

However, the exact amount of compensation you’ll receive will be issued on a case-by-case basis.

The new rules bring broadband switching in line with mobile switching.

Since 2019, mobile phone customers have been able to “text to switch” without the hassle of having to call their current network.

How one-touch switch works

The new “One Touch” process is designed to make it easier to switch providers and get a faster package, a cheaper deal, or better customer service.

It will also make it quicker – just one day when this is technically possible.

There are three steps to complete the switch:

1. A customer will contact their chosen new provider and give their details.
2. The customer then automatically receives important information from their current provider, including any early contract termination charges they may have to pay, and how the switch may affect other services the customer has with the company.
3. If the customer wants to go ahead, the new provider will then manage the switch.

The new process means that customers no longer need to notify their current provider 30 days before switching.

Instead, the operators handle all billing and activation dates in the background.

Rule changes

The findings come ahead of Ofcom’s ban on unpredictable mid-contract price hikes which comes into effect in January 2025.

Telecom firms have faced criticism for implementing mid-contract price rises on fixed contracts that exceed inflation over the past four years.

Due to clauses in contracts, providers are allowed to impose annual increases, typically in April.

These hikes are linked to either the Consumer Price Index or Retail Price Index inflation rate, which has surged during the cost-of-living crisis.

As a result, millions of customers experienced increases of up to 8.8% this year, adding as much as £50 to their bills.

However, from January 17, 2025, Ofcom will require telecom firms to display mid-contract price increases in pounds and pence.

The rules are designed to protect customers by ensuring they know exactly how much their contract will increase before they sign up.

Instead of being linked to inflation, which can fluctuate, the price rises will be clearly stated in pounds and pence.

However, some experts have slammed the rule change for “unfairly” impacting customers on cheaper contracts.

Earlier this year, The Sun revealed that millions of mobile and broadband customers on cheaper contracts will be hit by huge bill rises under the new mechanism.

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