The new FCA Consumer Duty will come into force on 31 July 2023. The Financial Conduct Authority (FCA) intends for the new Duty to increase levels of consumer protection in retail financial services markets, whilst aiming to promote a healthy environment for firms to thrive.
The new Duty will not be a tick-box exercise or be about introducing new process and paperwork but about a cultural change within FCA regulated firms. This means that motor retailers need to take action now to ensure they are compliant with the new Duty.
What does the Duty mean for Motor Retailers?
The Consumer Duty is about cultural change in firms that puts the customer at the heart of the business. It will build on the existing ‘Treating Customers Fairly’ principle, but it will be far more wide reaching and encompassing. The cross-cutting rules are high level and not specific, allowing for interpretation and flexibility in how individual firms implement them. The overall focus will be on what an individual customer needs and wants. It will be about ensuring:
The Consumer Duty will require retailers to evidence that their customers are receiving good outcomes and they are taking steps to achieve this. It will also require retailers to detail their negations with lenders and insurers about product design and suitability; ensure deal files are completed showing that customers have received and understood the information given to them; and to document reasoning for pricing structures. Staff training will also be key to ensuring retailers have the skills to ensure they are delivering what the Duty requires and consumers need.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA) which represents car and commercial retailers across the UK commented:
“NFDA runs an informed and structured Finance & Insurance group and is working closely with the FCA to ensure businesses are well equipped and prepared for the enhanced changes to the consumer duty.”
“With your NFDA Membership, franchised dealers are offered the correct support and guidance through this transitionary period, ensuring that retailers are regulatory compliant. NFDA offers structured guidance, implementation plans, SWOT analysis and GAP analysis to support retailers’ appointed representation. If your appointed representation would like to receive or discuss any of the documents, or require assistance with the new Consumer Duty Implementation, please contact the NFDA directly.”
NOTES TO EDITORS -
Adam Weeks, NFDA Communications Officer
Direct: 020 7307 3413
Mobile: 0788 003 9897