IT’S clear that leasing brokers must consider good customer outcomes to ensure full compliance with Consumer Duty.
The Financial Conduct Authority (FCA)’s recent report – Consumer Duty implementation: good practice and areas for improvement – reminds businesses of the consumer outcomes required by Consumer Duty and sets out good practice as well as areas for improvement.
The FCA has reiterated that it will act ‘where it identifies firms delivering poor customer outcomes’.
So, what does that mean for brokers?
According to the BVRLA, one of the areas that creates the most complaints is end-of-contract damage charges in lease contracts, so that has to be a focus. Consumer Duty states that businesses must be ‘proactive in delivering good customer outcomes’.
Damage charges can be confusing for drivers who, even with information from the BVRLA Fair Wear and Tear Guide, are often unclear on whether penalty charges are really fair. That’s where new technology, like the Wondle app can help support customers.
Leasing brokers can supply drivers with the Wondle app which uses AI to scan vehicle damage and assess whether it falls within fair wear and tear. If not, the driver can view estimated lease penalty charges and compare those with repair costs from Wondle’s repair network.
This allows customers to make an informed decision on the best way forward. To date, Wondle is reporting a 25% reduction in customer complaints for companies using the app.
“It is clear from this latest Consumer Duty update just how important it is for firms not to just wait and see if the FCA will intervene. End-of-contract damage charges are one of the few variable charges involved in a lease contract and also one of the most difficult for consumers to assess for themselves. Being proactive with drivers is absolutely critical to customer satisfaction.”
Consumer Duty came into effect for open products and services on 31 July 2023 with the aim of setting ‘higher and clearer standards of consumer protection across financial services.’ Closed services will also be regulated from 31 July 2024.
Find out how Wondle can help you with Consumer Duty
Broker News is working with Wondle to provide brokers with a special price:
- 1 month free trial then £166+VAT per month (paid annually);
- or £199+VAT paid monthly.
Contact Simon Carr (Simon@wondle.io) or Matt Cranny (Matt@wondle.io) for further information and to book a demonstration. Or visit the Wondle website.
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Laura is a writer and Head of Marketing for Broker News, with extensive automotive experience from senior marketing roles with RBS/Nat West, Lombard Vehicle Management and Unipart. She is also a self-confessed petrol-head.
