Treating Customers Fairly

Introduction

Principle 6, of the above Principles for Businesses, requires that a firm pays due regard to the interests of its clients and treats them fairly. The FCA’s Treating Customers Fairly initiative is designed to bring renewed emphasis to this principle. ContractCars.com makes it a priority to ensure we provide our customers with a professional and efficient service and the business embraces TCF within all areas as part of its everyday practice. We believe that it is embedded within the culture of ContractCars.com as a firm.  

ContractCars.com ensure that good outcomes, as well as the fair treatment of customers, is at the heart of the business. We monitor the outcomes that customers are receiving and where we find any gaps, or potential for customer harm, we remediate the position immediately.

Scope

This policy applies to ALL ContractCars.com staff. The FCA places particular emphasis on the responsibilities of senior management in implementing and maintaining TCF within a firm’s culture. Plans to ensure TCF should be kept under constant review by firms, who should update their TCF plans in line with regulatory developments, changes in FCA guidance on TCF, and as they learn from experience.

Embedding TCF at ContractCars.com

The FCA have issued six consumer outcomes which explain what they are trying to achieve through the Treating Customers Fairly initiative and the behaviors they wish to see firms exhibiting.

•       Consumers can be confident that they are dealing with a firm where the fair treatment of customers is central to the corporate culture.

•       Products and services sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

•       Consumers are provided with clear information and are kept appropriately informed, before, during and after the point of sale.

•       Where consumers receive advice, the advice is suitable and takes account of their circumstances.

•       Consumers are provided with products that perform as they have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

•       Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

In adopting the TCF principle we recognise that fair treatment of our customers is about adding value to the service we offer by aiming to:

 

protect the interests of our customers at each stage of the product life cycle, from promotion right through to after sales service, meet as best we can the unique needs of each customer by offering a transparent, efficient and professional service, and constantly reviewing our service to identify areas for improvement

In practical terms for the different areas of our business this means:

 

•       ensuring that promotional material is clear, compliant, jargon free and appropriately targeted

•       ensuring that sales staff have thorough training on all products they advise on or sell, understand who they are and aren’t suitable for, and are encouraged to challenge product providers where they spot inconsistencies, ambiguities or potential unfairness in the product literature or product features

•       operating sales remuneration systems which assure fairness to the customer as well as customer satisfaction, rather than only rewarding sales volumes

•       finding ways to encourage non-sales staff to implement TCF in their day to day business activities

•       keeping detailed records of customer instructions and profile and of the advice and options given before, during and after a sale – to help ensure we treat customers fairly and can deal with any complaints that may arise swiftly and fairly

•       Being available for after sales contact with clients where appropriate to correct or improve on the service already offered

•       ensuring that customer complaints are assessed fairly, promptly and impartially, and in line with Financial Conduct Authority (FCA) deadlines and rules

•       encouraging staff to recommend improvements to service following customer complaints – and monitoring the outcome

•       ensuring that staff are kept up to date with relevant training in relation to competence, data protection and other matters directly affecting the quality of service offered to customers

•       regularly monitoring and reporting on all of the above TCF activities as part of the company’s periodic MI, in order to assess TCF performance across the business and recommend changes where appropriate

•       ensuring that TCF values, which are set and communicated by Senior Management, are supported by all staff and understood in the same way

The FCA previously prescribed six outcomes which should be met in order for a firm to be compliant with the requirements of TCF. Here we look at measures ContractCars.com takes to ensure we deliver a TCF service. 

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

ContractCars.com staff will display a professional manner at all times when dealing with customers.

Senior management will encourage all staff to put the customer first at all times. Where necessary, development or in extreme cases disciplinary action may need to be taken if a member of staff displays scant regard for the interests of their customers.

If ContractCars.com decides it is necessary to change practices, procedures, staff structure or strategic direction, then senior management will ensure that when any such changes are made, that TCF is considered. The potential impact on the experience of the firm’s customers will be a primary consideration.

ContractCars.com will keep its complaints data under constant review. If customers are complaining, it is fairly obvious that they do not think they are being treated fairly. Complaints may arise because services are not being properly explained, or because customer service standards are poor. An unusually high number of complaints should give rise to concern.

Other management information will also be kept under regular review. Any developing trends will be considered and acted upon. If necessary, changes may need to be made to practices and procedures, additional training may be required for one or more staff members, or disciplinary action may need to be taken against one or more staff members. Details of any action taken as a result of management information analysis will also be recorded.

ContractCars.com will carry out regular risk assessments and maintain a risk register. This risk register will list adverse events that could occur, together with an assessment of how likely each event is, and how severe the impact of that event would be. Then details will be given of measures the firm can take to mitigate these risks. Events that could give rise to a risk of customers not being treated fairly will certainly be included in the risk register.

As ContractCars.com learns from experience, we will consider whether to change our TCF systems and controls. For example: complaints received may highlight deficiencies in our procedures, or regulatory guidance on a particular topic may change over time.

ContractCars.com will train all of its staff as to what TCF means and how the need to treat customers fairly should affect the way they go about their roles. Staff will also receive specific training as to their obligations regarding some of the key compliance procedures, such as complaints, anti-money laundering and data protection.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

ContractCars.com does not design the loan products for which it carries out broking activities.

We will ensure our staff are able to give expert advice in advising which lease car option will best suit our customers. We will never recommend an unsuitable product to a customer.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

ContractCars.com will ensure that all of our financial promotions are ‘clear, fair and not misleading’. The promotions will be checked before issue to ensure they comply with the relevant FCA rules.

Once a customer has expressed an interest in taking out credit, we will set out clearly, in a written Terms of Business agreement, the terms on which we will do business with the customer.

As a firm, we will not provide advice, but we will ensure that this is made clear to our customers. Customers will be informed that it will be the lenders who will make final decisions on whether to lend.

We will assist our customers wherever possible, answering any queries which fall within the scope of our activities, and will refer any other queries to lenders or other parties where this is considered to be more appropriate.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

We will ensure our staff are able to give expert advice in advising which lease car option will best suit our customers. We will never recommend an unsuitable product to a customer.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

ContractCars.com will strive to provide the highest possible standards of service to our consumer credit customers, whilst also recognising the limitations in what aspects of the credit application process we can and cannot get involved with.

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

Whilst ContractCars.com provides a service rather than a product as it is not a product provider. The firm will never impose any barriers on those wishing to make a complaint. For example, a customer’s expression of dissatisfaction will be accepted in the form it is received. We cannot ask a customer who complains by email, fax or text; via the website; on the phone; or in a face-to-face communication to put their concerns in writing before it will be looked at. Similarly, complaints received on a customer’s behalf from family members, claims management companies and lawyers must be treated as if the customer themselves had aired the same grievances.

If any member of staff receives of an expression of dissatisfaction that meets the FCA definition of a complaint, then it will be reported in accordance with the firms Complaints Procedure.

This procedure includes gathering full details of the complaint, investigating the matter as thoroughly as possible and as quickly as possible, making a decision which reflects the available evidence and, where deficiencies are identified, making a fair offer of redress to the customer that adequately reflects the loss and material inconvenience they have suffered.

In the event that the complaint is passed to the Financial Ombudsman Service (FOS), ContractCars.com will comply fully with all requests for information from the FOS and comply promptly with any redress instructions given by the FOS once the process has been completed.

Consumer Duty

The FCA published its policy statement and final guidance on the Consumer Duty in July 2022 (links below), and Guidance for Credit Brokers on implementing it in March 2023. The new rules and guidance came into effect for new customers in July 2023.

 

FG22/5: Final non-Handbook Guidance for firms on the Consumer Duty (fca.org.uk) 

PS22/9: A new Consumer Duty (fca.org.uk) 

Implementing the Consumer Duty for Credit Brokers (fca.org.uk)

The Duty comprises of an overarching principle, Principle 12, three cross-cutting rules and four outcomes. The Consumer Principle (PRIN 12) requires firms to “act to deliver good outcomes for retail customers”. This is a higher standard that both Principle 6 (pay due regard to the interests of customers and treat them fairly) and Principle 7 (pay due regard to the information needs of its clients and communicate information to them in a way that is clear, fair and not misleading).

The 3 cross-cutting rules set out how firms should act to deliver good outcomes for retail customers. Requiring firms to:

·       Act in good faith towards retail customers

·       Avoid causing foreseeable harm to retail customers

·       Enable and support retail customers to pursue their financial objectives

These rules articulate the standards of conduct that the FCA expect under Principle 12. These rules inform, and are supported by the four outcomes of the Duty which set out more detailed rules and guidance for achieving the objectives. The four outcomes are:

·       Products & Services

·       Price & Value

·       Consumer Understanding

·       Consumer Support 

ContractCars.com aims to ensure that Principle 12 is embedded in our approach to dealing with customers and in how we conduct business.

Training and Monitoring

All new staff will be trained on our TCF culture at the Start of their employment. All existing staff at ContractCars.com will be trained at least annually to ensure they abide by the firm’s TCF principles. Monitoring of the TCF principle will be the managements responsibility and will be in the form of Call Monitoring, Side-by Side Monitoring and 1-2-1’s/Appraisals.