Dealer finance, as with every other area of financial services in the UK, has gone live with the FCA's Consumer Duty. MotoNovo Finance's Commercial Sales Director, Debbie McKay, is keen to stress that this is just the start of the race, not the end noting;
"The F&I community has been working diligently for many months and, in some cases, years to get ready for the launch of the Consumer Duty. Now we are there; arguably, the harder work begins; all firms, including dealers and broker firms, must be able to evidence that customers are now truly at the heart of their businesses. As the regulator has said consistently, it is a significant shift in our expectations of firms."
The FCA ensured fresh focus was placed on motor finance providers' CEOs on March 1st. The regulator reminded firms of the implementation timeline, key elements of the Duty, how it applied to motor finance firms and their expectations for embedding the Duty. It is this embedding of the Duty Debbie is keen to stress, reflecting;
"Now is the time for all of us to step back and challenge ourselves. Have we made the substantive requirements expected, and what plans have we got for continuous improvement and monitoring?"
Not only has the regulator been explicit in their expectations for positive change from all firms, regardless of size, acting ‘swiftly and assertively where it finds evidence of harm or risk of harm to consumers,’ it is a message that will result in increased media attention and scrutiny following the Consumer Duty launch. It is something that has already seen momentum building. On July 24th, the Daily Mirror published a story about the launch under the heading, “New rules to stop customers being ripped off coming next week.”
In seeking to embed the Consumer Duty, Debbie encourages dealer leaders to ask themselves five questions:
- What has changed in how you promote, sell and provide F&I services to improve customer outcomes?
- How are you measuring it?
- What have you done to identify and support vulnerable customers?
- What steps have been taken to ensure affordability?
- How have you placed customer needs at the heart of your business?
Concluding, "It is not an exhaustive checklist, but I hope it ensures that delivering on the Consumer Duty is a continuing priority because I do not doubt that the outcomes expected will remain a moving target."
Press release issued by MotoNovo Finance, July 2023