14/03/2024

COMPLIANCE BREACHES IN TERMS OF FCA COMPLIANCE - High Importance

Dear All,

We should all be fully aware of the importance of compliance relating to the sale of Finance and Insurance (F & I) products, and in our obligations in terms of the FCA rules and codes of conduct by which we must abide.

Recently, we have seen an increase in the number of compliance breaches across the Platinum Group which we must bring to everyone’s attention, and the actions to reverse and eradicate this trend.

The main area where these breaches have been identified is at finance proposal stage. 

ACTIONS GOING FORWARDS

Before submitting a customer finance proposal (whether via Platinum Financial Solutions or at the dealership) it is your responsibility to ensure that the following process is adhered to at all times;

• The customer record must be created on Autoprocess.  This must be the person applying for the finance.  If at any point the finance applicant changes, a new record must be created, and the process started again. (An example would be a husband initially taking the finance and then altered to the wife)

• The customer must have seen and signed a copy of the Initial Disclosure Document (IDD) .  If a “distance sale”,  the customer must have either opened the Autoprocess link or received an email from you and replied approving the information.

• The customer must have seen and signed a copy of the Draft Demands and Needs.  If a “distance sale” the customer must have received a copy via email, replied approving the information, and given you their consent to move forward to finance application stage.

• If a customer was originally a cash purchaser, but then decided to take finance, you must amend the Draft to include the consumer credit qualification questions.  Before proceeding to finance proposal stage the customer must see the amended draft, sign it, or approved it via email.

If the above process is not followed by a Team Member, and we continue to propose a customer on finance without approval or qualification, the Team Member and the company will be in Breach of FCA Compliance Rules.

In such a circumstance where any breach/breaches are identified, it will be necessary to initiate a review (usually with your Sales Manager/Brand Manager) which will result in a record being kept in your personnel file.

It is very important as part of our obligations as a company that we evidence to the FCA that we take any form of breach seriously.  It is the reason why the Platinum Group has processes in place to help mitigate against breaches and ensure that any identified breaches are dealt with correctly and in a timely manner. Holding any reviews in the event of a breach will help to identify any further training requirements for an individual Team Member, but we of course prefer to avoid these scenarios altogether, rather than have no option but to document the breach and to take any remedial action that is required. 

Where breaches are identified and cannot be corrected retrospectively, for example, by not providing/sending and checking that customers have received and read the Initial Disclosure Document (IDD), or sending a proposal to the Finance Company prior to the Demands and Needs document being completed and approved, we reserve the right to withdraw payment of commission for the deal/s in question. This is not something we wish to implement, but will if we have to.

It remains the Platinum Group’ intention to encourage and motivate all Team Members to good performance, so all commission programmes will always be aimed to do just that.  For that reason, we don’t want you to be in a position where you cannot earn commission that you have worked hard to achieve, because a step in a process, such as one of the examples mentioned above, has been missed. 

Should you be unsure about any processes or systems that are in place within your dealership that may affect your commission earning ability, please discuss this with your Sales Manager or Director at the earliest opportunity.  We can also provide further refresher training if necessary.

With best regards,

Jeremy, Martyn, Paul, Michael & Jane

The Board of Directors, and the Group F & I Compliance Manager
Platinum Motor Group