AM Online

Dealers still ignorant of FSA rules

The vast majority of motor trade businesses, despite achieving FSA authorisation, are falling foul of the new insurance regulations. says a financial expert.

Speaking at the AM Aftermarket Conference, Shaun Godfrey, commercial director of Bankhall Investment Associates, says few traders understand the new rules.

He cites the example of professional indemnity insurance: “You have to have a professional indemnity policy, but how many have? Lloyds certainly has not sold 12,000 policies.”

He warns that dealers will be getting a specific set of questions that must be responded to within seven days or they will be put to ‘amber’. This means the trader will be monitored by the FSA, and intelligence from insurers and ombudsmen will be used to check compliance.

“If the firm is not having an open relationship with the regulator, it can be brought to book,” he says. For those struggling to comply with FSA legislation, Godfrey has more bad news: regulation of finance and loans is coming in the next three years.

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