Advice on the key areas dealers need to be reviewing to stay on “the right side of the FCA” will be given at Automotive Management Live.
Nigel Wray (pictured) director of Product Partnerships, which provides compliance services to the sector, will be on hand to give delegates advice at this year’s event, which will take place at the NEC in Birmingham this Thursday (November 9).
Wray said: “While the FCA continues to hit other sectors hard, for example Brighthouse, the rent to own retailer, having to implement a £15 million redress scheme, the motor sector has had more than its fair share of negative publicity this year.
“Many firms still appear to view compliance as a ‘never changing’ administrative burden, with the core part of FCA regulation being the authorisation process and then simply submitting Gabriel data and paying annual fees.
“But if you’re not keeping pace with what’s happening in the compliance space, you could find yourself in hot water.”
Wray identifies a host of areas which dealers need to have on their radar:
- FCA remuneration and performance management review
- FCA Affordability and credit worthiness review
- FCA Dear CEO letter regarding complaints
- Spotlight on potential mis-selling in the motor finance sector by the press, MPs and Bank of England
- Financial Ombudsman Service (FOS) rules in favour of a customer regarding excess mileage charges
- New anti-money laundering rules
- Motor dealers contacted about non-compliant social media advertising
Wray advises that it is important that dealers are not in a mindset that nothing changes in the regulatory space.
“For example, new complaints legislation came into force in June 2016, but if you never changed your processes on or after that date, then you are not acting compliantly,” said Wray.
“The view of the FCA is that many firms aren’t; that they don’t recognise and correctly deal with complaints, hence the FCA’s ‘Dear CEO letter’.”
He warns that remuneration, affordability, anti-money laundering and social media promotions are all subjects which regulated firms should be reviewing and making changes where necessary.
“If you’re not dealing with regulatory changes and new FCA guidelines when they are first published you’re storing up problems that may bite further down the line.
“Motor finance sales processes have been heavily criticised in the press this year. This often comes from a position of ignorance and mis-reporting of the facts but it’s still an area for constant review.
He also said that a less reported, but potentially more important issue, is the FOS ruling in favour of the customer regarding excess mileage charges.
“While the agreement clearly stated the annual limit was 7,000 miles, the driver stated she had made it clear she would drive up to 10,000 miles a year.
“On reviewing the paperwork and records of discussion from when the car was sold, FOS decided it hadn’t been made clear enough. The business was told to waive the excess mileage charge.
“The problem for firms is that if they are not proactively monitoring the delivery of positive customer outcomes now, non-compliance may not be evident to them until the finance contract comes to an end.
"Don’t wait until the problem surfaces in the future because then it may be too late with costly redress programmes needed and reputations badly tainted.”
Product Partnerships can be found at stand A28.
The Automotive Managment Live one-day expo also includes best practice seminars, a profit clinic and insight theatre focusing on F&I, used cars and the new data protection rules GDPR.
There is still time to register for free tickets if you are a dealer or a manufacturer with pre-online registration.