24 November 2014

Speaking to retailers and finance providers, a new trend is emerging surrounding FCA ‘regulations’. Because these regulations are in fact principles, rather than clear and easy to follow laws, interpretation is needed as to what precisely is required when selling consumer finance.

This has resulted in two camps emerging.

The first is the group that are taking the more cautious, customer-centric route to market. These finance houses and retailers are going as far as they can to ensure that they stick with the spirit of the FCA principles. The second group sails closer to the wind. They’re abiding by the principles but are more interested in market share and sales now than they are going above and beyond the FCA guidance.

So one group plays the longer game while the other thinks it’s gaining ground now. The first group is betting that in a year or so, when the FCA turns its heat to the business of car finance (and I’ve not met anyone who thinks otherwise on this point), they will be clear and standing on higher ground than the second group. So avoiding investigations and fines.

Given this one isn’t going away, the only question is; how much extra business will go to those offering aggressive deals now, against those looking to longer-term gains as a reward for playing super-safe.

I know I’m a cautious chap, but the fines the FCA will impose on a business shown to have diverged from the principles means I know to which camp I’d rather belong.

Tristan Young

Tags: Approach to FCA