Ben Garside: FCA is on the warpath so expect sweeping changes

Ben Garside: FCA is on the warpath so expect sweeping changes

I’M currently sitting in London following a conference entitled Digital Results in Financial Services and reflecting on the content and the changes ahead.

Having worked in car finance for almost 15 years, I’ve been through many environmental changes and market conditions, and working in marketing for quite a bit longer than that, I’ve also seen a lot of unethical practices. 

The Financial Conduct Authority (FCA) has been on the warpath to clean up some of these bad practices, and I reckon this is just the tip of the iceberg to ensure our trade is ‘treating customers fairly’. 

Recently, the FCA released its final findings report on motor finance, and I believe this will have turned a few heads with regards to difference in charges (DIC) commissions, commissions practices regarding disclosure, and broker/dealer impartiality.

The FCA stated that ‘change is needed across the market, to address the potential harm we have identified’. With this in mind, I believe we will see wholesale changes throughout the car finance industry over the next 12 months, with car finance companies being pushed into either a scaled or flat-fee commissions structure.

As well as this report, there has also been an increase in the number of motor dealers being contacted by the FCA regarding financial promotions, as it has concerns about their social media advertising. 

In its November 2018 Regulation Round-up, the FCA wrote: ‘Our financial promotions team has intelligence that some motor finance firms are not complying with our rules in CONC 3. This is particularly in relation to posts on social media platforms such as Facebook, Twitter and Instagram.

 ‘The main issues we have seen include not displaying a representative example when triggered, not making the representative APR prominent, not mentioning the legal name of the firm, not displaying or a lack of prominence of the credit broker statement [and] displaying monthly costs for a vehicle without indicating whether this is based on a credit or hire agreement.’

Almost three years ago, I wrote about the FCA’s Clear, Fair & Not Misleading criteria and said that within the motor trade we had to be careful with every promotion and should be focused on giving good customer outcomes. Well, now I’m reiterating this! 

Every car finance advertiser should be adhering to the regulations and if you aren’t, well, expect to be visited or contacted by the regulator – and please be careful who you take advice from as well. I have seen agencies offering incorrect advice on dealer forums and social media pages, completely ignoring the regulations – and even stating that there aren’t any regulations!

I advise anyone in our market to read CONC 3 and acquire a thorough knowledge of what’s required. 

There’s also FCA guidance on its expectations regarding social media – click here. 

If you still feel unsure, speak to one of your providing finance companies. They can give you guidance and advice on your promotions. Remember, though, that you’re still responsible for signing off your advert and must have a process in place to do so.

Ben Garside is marketing manager for First Response. Call him on 07817 518739 or email ben.garside@frfl.co.uk

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