Automotive Compliance, the appointed representative (AR) network working within general insurance meditation specifically for the motor industry, has been confirmed by the Financial Conduct Authority (FCA) as a principal firm for consumer credit.
It means that dealers can join its network as ARs and sell either or both consumer credit and general insurance products, without direct FCA authorisation.
Automotive Compliance is the only company in the UK with this permission, issued by the regulator, to support motor dealers FCA compliance for consumer credit.
Motor dealers will now be able to advise and sell finance under the umbrella of Automotive Compliance without direct FCA authorisation.
Currently a motor dealer offering finance packages operates under an interim consumer credit licence inclusive of credit broking, debt counselling and debt adjustment categories.
These dealers are now receiving their landing slots and application packs to apply for their permission for their consumer credit licence from the FCA.
Dealers are required to complete, not only a financial business plan, but a regulatory business plan, risk mitigation flows, show evidence of compliance manuals, documented compliance procedures and ongoing monitoring programmes.
However, as an AR of Automotive Compliance a motor dealer will be categorised in the limited permissions regime, with all process, staff training, procedures, paperwork and monthly FCA reporting becoming the responsibility Automotive Compliance.
The taking on the of the risk and responsibility of the motor dealers consumer credit licence makes Automotive Compliance responsible for, and monitoring of, the advice dispensed by the dealer to the customer when selling finance packages.
Paul Guy, Automotive Compliance managing director, says: “We will not be taking this added responsibility lightly, and have been working with the National Franchise Dealers Association, Finance Leasing Association (FLA), finance houses and our current general insurance network dealers to enhance our online demands and needs system, to include the new financial regulations.
"These enhancements allows the dealer to assess which financial products best suits the customer and recommendations are made based upon factors such as suitability, circumstances, affordability and desired length of ownership.
"The dealer then presents the customer with finance packages that, not only suit their needs, but also meet their desired trade cycle. Then all aspects of the advice and transaction are saved to their database to show evidence of the transaction, should the dealer be called upon to verify the advice given to the customer and why. Simultaneously a paper copy is produced for the customer to retain.
"Also, with our roots deeply embedded in the retail motor industry, we were conscious that we have to consider the dealer, by removing the now added burden of re-application for direct Consumer Credit authorisation and implementation of process and procedures the added regulation brings."
"Automotive Compliance will take that responsibility from the dealer and give them the tools, training and thinking to treat customers fairly, now across both general insurance and consumer credit aspects of FCA regulation.”