In their recent report on motor finance, the FCA made clear that they would be consulting with the industry on long term changes to the market - and that further scrutiny should expected. The report was also clear on the FCA’s expectation that action should be taken now to improve compliance with current requirements and ensure fair treatment of customers.
Karl Werner, MotoNovo Finance’s Deputy Chief Executive, sees many opportunities, both for growing finance in the used market and for improving overall customer outcomes.
Werner said: “While the FCA has yet to require any specific changes, there can be no question that dealers need to review their current approach to financial regulation and ensure that they are complying with current standards. This is in both their interests and those of their customers. MotoNovo will be working with its dealers to help them comply with the spirit, as well as the letter, of FCA regulation.”
MotoNovo is urging dealers to act now, suggesting that initially they pay particular attention to three key points, which research by MotoNovo suggests are common areas of risk:
Advising customers about all sources of remuneration, including introducer commission from lenders
Making sure that all product claims (terms like ‘guaranteed acceptance’ or ‘rate guarantee’) are valid.
Ensuring that all financial promotions are fully compliant.
Werner observed: “There is definitely scope for improvement and our research suggests that is true for franchised and independent dealerships alike – business size proves no barrier to mistakes.
“We will work to equip our dealers with knowledge and tools to help them comply with current and future regulations, positively benefiting both their businesses and their customers.
“In the meantime, we urge every dealer offering finance to familiarise themselves with the three key risk areas we have identified. They should also look carefully at the documentation and processes they have in place for treating customers fairly, disclosing commission, handling complaints, and training staff.”