On 28th January 2021 the regulation on discretionary commission models and changes to the commission disclosure requirements in motor finance sector came into effect.
The Financial Conduct Authority (FCA) released its Policy Statement (PS20/8) regarding motor finance discretionary commission models and consumer credit commission disclosure on 28 July 2020.
Discretionary commission models are now banned and there are changes as to how and when the presence and nature of commission is disclosed to customers. These changes are designed to ensure that customers receive timely and relevant information to help them make their finance purchasing decision.
The FCA undertook a number of mystery shopping exercises on dealerships to understand processes more clearly when devising their Policy Statement and we can expect them to use this, and other methods when they begin their supervisory work on the motor finance market in September 2021.
Due to these latest commission changes and a deadline set of 31st March for solo-regulated firms to undertake their first assessment of their certified staff’s fitness and propriety under the Senior Managers and Certification Regime (SM&CR), there is increased importance for lenders to have clear and robust oversight of their dealer and intermediary networks.
Motor finance providers have a responsibility to make sure that dealers are complying with the FCA requirements especially around treating customers fairly and the new commission rules.
To support industry partners with the new regulations, VAS now provide an independent ‘Dealer Oversight Audit’ to proactively identify and minimise risk in this area; and to ensure they remain compliant and to safeguard the professional reputation of funders and dealers.
Find out more about our Dealer Oversight Audit and how we can help funders to ensure they remain compliant.
Find out more about the FCA’s regulation and rules.
Our priority at VAS is to support our clients as they continue to adapt to the circumstances of the pandemic and to protect the well-being of our colleagues. For colleagues who must be on site, we ensure they are provided with a safe environment by applying strict health and safety protocols.