Business 52 www.aftermarketonline.net JULY/AUGUST 2024 Going the extra mile in standards of care Jonathan Barrett, CEO and co-founder at Comentis, considers what the arrival of Consumer Duty means for automotive professionals Having taken effect on July 31, 2023, the Consumer Duty (CD) requirement to identify and support all customers at risk of vulnerability should now be a key focus for all motor dealers and manufacturers in the UK who offer finance. But what does CD mean for automotive sales professionals specifically? And, given the fact that the regulations are now in place, how has the industry been affected so far? Most importantly perhaps, what do automotive professionals need to do next to ensure they are ahead of the game? CD will have a fundamental impact on automotive firms providing regulated financial products or services to consumers. This also includes a wide range of vehicle add-on products, from asset protection to cosmetic damage cover. If a consumer is buying a new car, the automotive firm will likely need to assess the customer to understand whether they are at risk of vulnerability. CD requires firms to act to deliver good outcomes for their retail customers, and indeed, the regulations will likely make it more important than ever for dealers to review the products and customer service processes they currently have in place. Challenging landscape I think it’s important that we start by saying that, at the very least, the CD vulnerability process is very challenging. And indeed, it is challenging for many sectors, not just the automotive sector. Why? Well, I think what makes this task so daunting is that financial vulnerability isn’t just determined by how much money someone has access to. In fact, under the Financial Conduct Authority’s (FCA) definition, vulnerability is categorised by four key drivers: health events, life events, resilience and capability. This means that a change in circumstance, whether it be a divorce, a new baby, an illness or a bereavement, could easily leave someone vulnerable. So, someone who might not be obviously vulnerable may well be. Recognising these signs of vulnerability is a complex process and it can put a huge amount of pressure on automotive sales professionals to consistently carry out a task that could prove challenging even for a fully trained mental health professional. Taking vulnerability seriously It’s important to remember that while automotive companies not following through on their CD requirements will — of course — face repercussions from the FCA, CD has not been implemented to punish those that fall short. Rather, what the FCA wants is for vulnerability to be taken seriously. It wants to see that the foundations are in place, ready for us to build on Recognising signs of vulnerability is complex… and can put a huge amount of pressure on automotive sales professionals
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