I WANT to take issue with the story Regulatory threat to PCH on treating customers fairly run in Broker News, November 12, 2019..
Karima Haji, director of Auto Novo, makes the point that treatment of leasing brokers is more ‘fluid’ than that of captives, car finance brokers and car dealers.
Not only is that statement baffling, but it’s incorrect.
All sectors are regulated equally by the Financial Conduct Authority (FCA), and if any sector has gone above and beyond to ensure it is in order and fully compliant, then I would suggest it is the leasing brokers and the funders who operate in that leasing broker space.
This has been achieved in tandem with the BVRLA, with many leasing brokers volunteering to use the FCA’s training modules as part of their best practice approach which includes treating the customer fairly.
Furthermore, the FCA came to the recent BVRLA Leasing Broker Committee meeting to explain more clearly its position on car finance brokers and the actions it wishes to impose on breaking the link between interest rate setting and commissions – see FCA presents on commissions at BVRLA Leasing Broker Committee.
The FCA said it was only for commission paid on consumer credit products such as hire purchase or personal contract purchase, and not rental agreements such as personal contract hire.
So I fail to see how personal contract hire will be regulated more closely by the FCA. Brokers have taken the steps they need to treat the customer fairly, and as my colleague Keith Hawes pointed out in the article, if brokers or funders were getting affordability wrong, then the default rates would be high.
They are not.
What I suggest is required would be greater education, so the public understands more about the finance products on offer and the media reports more accurately on the industry.
We would get more balance and less of these baffling ideas. Perhaps even acknowledgement that leasing brokers are doing it right.
Now that would be a story.
Martin Brown, managing director, Fleet Alliance Group.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
