Oodle Car Finance, a UK provider of used car financing, has released a report shedding light on the challenges faced by dealers in meeting the stringent requirements of the Financial Conduct Authority (FCA) under the Consumer Duty mandate.
This mandate aims to ensure that dealers uphold transparency and deliver favourable outcomes for customers, particularly regarding financial communication.
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The Navigating Consumer Duty: Communicating finance to your customers report highlights a significant hurdle: the pressing need for dealers to communicate finance terms clearly and effectively, while also demonstrating compliance with regulatory standards.
Recent research cited in the report underscores a concerning trend among consumers, particularly younger demographics, who struggle to grasp fundamental financial concepts. For instance, a study conducted by Ford Credit reveals that half of individuals aged 18 to 24 are unable to identify the interest rate on their car loans, while one in ten consumers admit to a lack of confidence in explaining key financial topics.
Phillip Williams, Founder and Chief Commercial Director at Oodle, has expressed concerns arising from conversations with dealers, revealing widespread struggles in adapting communication practices to align with the mandates of the Consumer Duty.
Williams notes that during tests conducted on their own communications, numerous customers showed a lack of understanding regarding common financial terms such as ‘arrears’ and ‘default’. In response to these challenges, particularly among dealers lacking internal compliance teams, Oodle has taken proactive steps to offer guidance and support.
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By GlobalDataThe newly released guide from Oodle offers a detailed roadmap, guiding dealers through the intricacies of the customer’s car-buying journey while providing actionable insights on effective communication strategies.
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