The Financial Ombudsman Service (FoS)’s 5-year plan, unveiled earlier this month, to tackle car finance complaints is expected to have implications for dealerships, according to Mark Standish, the chief executive of financial services provider MotoNovo Finance.
Standish said while two of the FoS’s three strategic priorities focused on its capabilities, the second – preventing complaints and unfairness – carried a strong message for all financial services providers, including dealers.
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By GlobalDataStandish said: “Customer needs must be at the heart of the dealer model and that FoS highlights the prevention of complaints and unfairness so prominently points to a financing issue to be addressed positively.
“Given the importance of reputations in an increasingly digital world, preventing complaints should be seen as crucial and should be ‘baked-in’ to product and service development.”
Reviewing the types of motor finance complaints received by FoS, the Ombudsman has identified the following customer complaint themes:
- Their car is faulty or not of satisfactory quality;
- Their car or finance agreement was mis-sold or misdescribed to them and they’re unhappy with a key term – like the annual mileage allowance;
- They’re unhappy about charges that they’ve been asked to pay at the end of the agreement;
- The finance agreement was unaffordable, or they weren’t treated fairly when they were in financial difficulties.
In the ‘new normal’ that businesses are all emerging into after the coronavirus lock-down, the value of service and reputation have become much clearer, said MotoNovo.
With finance so integral to many car sales, preventing complaints and any unfairness through customers’ car financing journeys is a service enhancement opportunity that can help dealers of all sizes, the Wales-based provider said in a statement.
MotoNovo
Collaborating with customer-led finance partners must be a natural step: “At MotoNovo, we are committed to supporting dealers to create positive changes for the emerging new operating environment.
“FoS’ strategy points to the need for change and I’m confident that we can help dealers to start addressing three of the four problem areas identified by FoS that might impact them, their customers and reputation.”
Standish said the first is greater use of digital technologies, such as the company’s findandfundmycar.com that “can help dealers to deliver a thorough and controlled customer journey that signposts all essential information and charges openly and transparently.”
The second, he said, the risk-based pricing MotoRate approach that is enabling dealers to promote a highly competitive headline annual percentage rate (APR) that helps potential customers better understand their monthly payments, “helping buyers to assess the affordability of a car to their budget with the final interest rate tailored to each customer’s circumstances.”
Thirdly, a service-led market approach with customers assessing dealers through reviews, that allows the selection of finance partners with great customer feedback.
Standish said: “I’m particularly proud of the customer feedback during recent weeks when we helped over 40,000 customers (scoring on average 4.7 out of 5 from 20k customer reviews).
“We don’t take anything for granted; the last three months have crystalised the need for positive change now. We aren’t just aiming to minimise complaints; we are looking to delight customers and enhance that all-important commodity for dealers – reputation,” he said.
