Dealer awareness on Consumer Duty rules spikes as July 31 deadline approaches

Dealers’ awareness of new Consumer Duty regulations has increased from 28% to 91% over the last quarter, according to Close Brothers Motor Finance.

The Financial Conduct Authority’s (FCA) new Consumer Duty rules are aimed at creating higher standards for consumers and improving competition in the retail financial services market.

Within the motor retail sector, this will predominantly impact dealerships providing financing and insurance products.

Businesses will need to demonstrate that they’re continuing to act to deliver good outcomes for customers by the deadline of 31st July 2023 and beyond. The data is showing a positive trend as more and more dealers become aware of Consumer Duty and develop a strong understanding ahead of the implementation.

The Forecourt Foresight research was conducted by Close Brothers Motor Finance, surveying 144 dealers in the UK in June 2023.

Lisa Watson, director of sales at Close Brothers Motor Finance, said: “Over the coming weeks it’s vital that dealers and decision makers in the automotive industry develop an understanding of the new Consumer Duty changes, and the role they need to play as distributors.

“It’s heartening to see that nearly all dealers are now aware of consumer duty and understanding is growing fast.”

Watson said the new rules are there to offer more protection and better outcomes for consumers but will also encourage best practice from dealers.

She added: “Failure to comply with the new rules could result in significant reputational damage, and potentially financial implications in the future if FCA guidelines are not adhered to.

“It would also mean that customers are not getting the required levels of service from their dealer.

“Close Brothers Motor Finance has been supporting dealers since March with information and assistance including educational, face-to-face masterclasses on the Duty and providing access to an online hub full of helpful information.

“This support will help dealers to implement any changes required to comply with the new rules. Dealers can also find out more directly via the FCA website.”