A survey of 200 dealerships has revealed concerns over compliance requirements is putting many at risk of losing their credit broker status, with one in five saying FCA regulation is the single biggest challenge facing their business in 2014.
In the survey, carried out by Close Motor Finance in June, the majority (86%) say they plan to apply for full FCA authorisation when their interim permission expires.
For those not intending to apply, the biggest reason cited was a perceived lack of information or expertise to enable them to do so. Of those intending to apply, two fifths identified compliance procedures as an area of the application process they would require expert assistance with.
Paul Kaye, sales and marketing director of Close Motor Finance, said the FCA legislation is a daunting reality for many dealers and that there has been, and will continue to be, much effort and change required to adapt to the new regulatory landscape.
“Feedback from our survey indicates that the majority of application deadlines fall in the first quarter of 2015 so we would encourage dealerships to review and familiarise themselves with the guidance now so there are no nasty surprises down the line.
“Our main message to dealers is to face the issue head on as missing the application window means ceasing to legally operate as a credit broker.”
Kaye said the Close Motor Finance survey revealed that 70% of dealers sell more than 20 vehicles on finance per year so credit related activities form a significant part of their business.
“If dealers are unsure of what steps to take or would simply like reassurance that what they are doing is correct, our team of experts are always on hand to help.”
The FCA took over regulation of the UK consumer credit market on April 1 this year and in a shake-up of the industry introduced new authorisation requirements that require any motor dealerships involved in consumer credit activities to apply for full permission between October 2014 and January 2016.
> AM is holding a compliance event, with FCA as its central theme, on November 18 at the Oxford Belfry. For more information email email@example.com.