7:14 am, May 31, 2023
Dealers are being urged to make sure they’re fully prepared for when the Financial Conduct Authority’s new Consumer Duty comes into effect.
The rules will set higher and clearer standards of consumer protection across financial services, and will require firms to put customers’ needs first.
They come into force on July 31, and with that date now just two months away, Close Brothers Motor Finance has outlined five key things that dealers should be thinking about to ensure they comply with the new regulations.
Review your sales processes
Car dealers should consider looking at every aspect of the sales process and customer touchpoints to satisfy themselves that they’re acting at all times to demonstrate that they’re delivering good customer outcomes.
Evidence of this is very important, says Close Brothers, so it’s worth looking at ways of measuring, such as using the information gathered as a business from customers to demonstrate value.
Customer communication
Dealers might want to look at all their customer communications material – including their website – for clarity and simplicity.
For instance, is the nature of products, their benefits and limitations explained in a way that customers can understand so they’re making informed decisions?
Know how you’ll document and review product information
Car dealers receive product information from their finance providers.
As such, they could consider demonstrating how they deliver good customer outcomes by documenting how they regularly review the way they sell their products to make sure customers use the products as anticipated.
Dealers should also document the regular training they provide to their teams on how they sell the products.
Customer support
When customers do need support from dealers, the FCA will want to know that the process for contacting dealerships is clear and simple.
It’s worth reviewing existing customer communications and the support provided to see if that could be improved.
Customer vulnerability
A key part of the FCA regulations is to protect vulnerable customers of all kinds.
Therefore, making sure that communications are appropriate for those who are vulnerable – for example, if they have physical or mental health conditions, as well as financial issues and lack of understanding – is important.
Dealers need to think about how they identify, record and provide the right levels of support for vulnerable customers.
