8:02 am, April 3, 2014
WITH new FCA consumer credit regulation in place, Paragon Car Finance predicts that there will be greater emphasis on clear customer communication, robust affordability assessments and more uniform commission payments for car finance sold through brokers and dealers.
The accompanying Consumer Credit sourcebook (CONC), which has also come into effect this week, requires that lenders, brokers and dealers put treating customers fairly firmly centre stage and specifically cautions lenders against using differential commission schemes that are structured solely around volume and profitability incentives.
Paragon says lenders can assist dealers with their transition to the new regime by providing products that are easy to understand and can be adapted to different budget requirements. Good quality customer documentation and structured affordability tests that are built-in to the lender’s online application system will also be critical.
Julian Rance, head of Paragon Car Finance, said: ‘Paragon welcomes the new consumer credit rules and, in particular, the heightened focus on treating customers fairly.
‘As a lender, it is important that we develop products that are easy to understand, retain visibility and control over the pricing of our products to the end customer and ensure robust checks are in place within our application systems to assess affordability.’
