Link(s): Communicating with motor finance customers about commission | FCA
Context
Alongside its latest Policy Statement in relation to handling motor finance commission complaints, the FCA has set out its expectations going forward for firms communicating with motor finance customers about commission. The FCA has made a clear link to its expectations under the Consumer Duty consumer understanding outcome.
Key points to note and next actions
- The FCA has provided a useful summary of the summary of the Court of Appeal’s main conclusions on the common law and equitable duties that arose in the three motor finance cases. These conclusions hinge significantly on the informed consent of the consumer.
- The FCA states that firms should seek legal advice to inform their responses to the judgment (including what they decide to do in relation to commission disclosures and informed consent). The FCA is clear that, as a Regulator, it is not able to provide this advice.
- There is no prescription in this web page about what must be done (so no hard commission disclosure requirement, no expectation of gathering consent). Rather, the web page sets out expectations in relation to engaging communications, relevant information, simple and plain language, timely communication, brokers and lenders working together to drive good outcomes, and testing and monitoring customer understanding. All of these general good aims should be viewed, though, in light of the Court of Appeal’s conclusions and good legal advice.