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Guest opinion: FCA moves towards enforcement of finance compliance


With the bulk of FCA consumer credit authorisation now complete, the regulator's focus is likely to shift towards enforcement. It's time to re-visit processes and controls in the showroom and online to ensure compliance standards are being observed.

The March edition of Which? reported on the findings of 24 mystery F&I shops to franchised dealers.

Some of the visits found there were shortfalls in the point of sale finance experience, including a number of issues obtaining a written finance quotation with some dealers providing an incomplete quote and others failing to provide any information at all.

To help ensure dealers are operating in a client centric manor, the TCF approach required by the FCA states authorised firms ‘pay due regard to the interests of its customers and treat them fairly’.

Now that the regulator’s attention is moving away from authorisation and towards enforcement, it is essential that dealers look again to ensure they are meeting the TCF approach and delivering the 6 outcomes required.

Given the clear risk to both the dealership and the nominated Approved Person of falling short of FCA requirements, all dealers should be conducting regular reviews of their showroom and online sales practices and procedures to ensure that a consistent high standard and professionalism is maintained.

Central to the review dealers must ensure that information provided to all customers about the dealership and the products which are available through it is ‘clear, fair and not misleading’.

Dealers also have to ensure that the information enables the customer to assess whether a particular product suits their needs and circumstances – and also whether they can afford it.

The provision of a complete and accurate written quotation should be seen as a minimum requirement to fulfil this requirement and all customer-facing staff should be ensuring this is provided.

FCA regulation has brought new standards and these must be integrated into every finance discussion.

I firmly believe the required standards can be built into a tailored and distinctive dealer approach that differentiates the business, elevating the customer’s buying experience making the dealer’s finance proposition compelling, compliant and memorable.

The six FCA outcomes

1.     Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture.

2.     Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

3.     Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

4.     Where consumers receive advice, the advice is suitable and takes account of their circumstances.

5.     Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

6.     Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

Author: Mann Island Finance's managing director Jo Jenner

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