Consumer Duty Legislation – Are You Ready?

As of July, 31st 2023 a new Consumer Duty directive from the FCA has been in initiation. This comes in further pursuance of their ambition for the automotive industry to treat customers fairly.

The objective of the proposal in summary is as follows:

• A new Consumer Principle that requires firms to act to deliver good outcomes for retail customers.
• Cross-cutting rules providing greater clarity on our expectations under the new Principle and helping firms interpret the four outcomes.
• Rules relating to the four outcomes we want to see under the Consumer Duty. These represent key elements of the firm-consumer relationship which are instrumental in helping to drive good outcomes for customers.

These outcomes relate to:

• products and services
• price and value
• consumer understanding
• consumer support

Whilst nobody will be happy to see even more regulation of the industry, the objectives of the Consumer Duty directive represent common sense.

Dealers whose objective is to provide an outstanding experience, making it easy for customers to buy, own and maintain their vehicle, ensuring they will want to do so again and recommend them to others, will not find the directive onerous. However, dealers should be cognisant of the need to implement processes that allow transparency should they be challenged on how they deliver on the directive for their customers.

This should begin with examining the culture of the organisation. How do you recruit? How do you induct? What training methods do you use and how do you review them? How well embedded is sales process and how well is it executed? What level of product knowledge do your team have, especially with regards to EVs? How well do they present products and in particular build value into their proposal? Are you confident all your team can present sufficiently well that they help customers to make an informed decision? In particular, do all your team provide a clear and concise explanation of finance products?

Demonstrating your effectiveness in these areas will be key to satisfying the FCA that you have embraced the directive and take “treating customers fairly” seriously.

Motorvise have a suite of products and services that can help you to implement the necessary foundations and enhancements, from recruitment, training and mystery shopping, to management development and EV advocacy.

 

For more information visit The Automotive Experts | MotorVise or call 01325 637 251