In Q2, the Financial Conduct Authority (FCA) is expected to make its policy announcement concerning the future of motor finance. With a clear focus on discretionary commission models and commission disclosure, we wanted to make sure you were prepared for upcoming changes.
What do the FCA rules mean?
By keeping things transparent and open, customers will be able to make a more informed decision. It will also help to build trust between dealers, customers and lenders which will improve the buying process for everyone.
Don’t forget, commission disclosure is not new – since the FCA started regulating consumer credit in 2014, it has been a requirement to make customers aware of the existence of commission. Customers also need to be told the amount of commission, or likely amount, should they ask.
We wanted to make sure you have all the information you need at your fingertips so that you can make sure your processes remain compliant going forward. Under current proposals, the clarifications around commission disclosure will come into force the day the FCA’s policy statement is published, expected in Quarter 2 2020.
Things to think about:
- Existence and nature of commission will need to be disclosed in all cases, including how the commission arrangement impacts the total amount the customer pays.
- Commission disclosures should be prominent and you'll need to be able to show the amount or likely amount of commission if the customer requests it.
- Have robust processes and controls in place to ensure you are following the regulatory requirements every time.
Commission process improvements made today will help to protect your business and people and set you up for future developments. If you’re a MotoNovo dealer, you’ll be able to find more resources in the Dealer Hub including information on the MotoClick documents.
Take a look at the latest FCA rules and what they mean here.