Consumer Duty for car finance brokers: what good evidence looks like

The FCA’s Consumer Duty came into force for products open to new customers on 31 July 2023. Most brokers did the initial work: a gap analysis, an updated policy, a board sign-off. The harder part is the day-to-day: being able to show, with evidence, that your customers actually get good outcomes.

This guide is practical, not legal advice. The FCA’s own Consumer Duty materials are the place to check detail.

The Duty in one paragraph

Firms must act to deliver good outcomes for retail customers. That sits on three cross-cutting rules (act in good faith, avoid causing foreseeable harm, and enable and support customers to pursue their financial objectives) and four outcomes: products and services, price and value, consumer understanding and consumer support.

What the four outcomes mean for a car finance broker

Products and services

The finance you arrange should suit the customer it’s arranged for. As a distributor, you need to understand the lender’s target market for each product and share information back with lenders when things don’t fit. In practice: know why a customer was matched to a lender and product, and record it.

Price and value

Customers should get fair value. For brokers, that brings commission into focus: how it’s structured, what it means for the customer’s cost, and whether the overall deal (including add-ons like GAP and warranty) represents fair value.

Consumer understanding

Customers need information they can understand, at the right time, to make good decisions. That includes how you’re paid. Disclosing commission clearly, and being able to show the customer saw and accepted that disclosure, matters.

Consumer support

Customers should be able to get help, make changes and complain as easily as they bought. Slow responses, unanswered messages and complaints that stall are all Consumer Duty problems as well as service problems.

Vulnerable customers

The FCA expects firms to understand the needs of customers in vulnerable circumstances and respond to them. For a broker, that means spotting signs of vulnerability, recording them appropriately, adapting how you communicate and making sure everyone who handles the deal can see what’s needed.

What good evidence looks like

The FCA’s question is always some version of “how do you know?” These are the records that answer it:

• A history of every change to a deal: who changed what, and when.
• Signed commission disclosure on each deal.
• Every conversation in one place: emails, texts, calls and portal messages on the deal, not in personal inboxes.
• Response times: how quickly leads, questions and complaints are answered.
• Complaints data with root causes, tracked over time (see the DISP guide).
• Outcome monitoring: declines, cancellations, arrears signals and complaints by lender, product, agent and lead source.

The firm also has to report to its board at least annually on whether customers are getting good outcomes. Those reports are only as good as the data under them.

Where it usually breaks down

Not in the policy. In the gaps between systems. If the conversation is in WhatsApp, the disclosure is a PDF in a shared drive and the decision is in a lender portal, you can’t easily show the whole story. Consumer Duty rewards brokers who keep the whole deal in one place.

How DealStack helps

In DealStack, commission disclosure is signed on the deal, every change is recorded field by field, and every email, SMS, WhatsApp message, call and portal message lands on the deal in one conversation. Complaints run to DISP timelines with root causes and the half-year return, and the report builder lets you look at outcomes by lender, agent and source without a spreadsheet.

Book a demo and we’ll show you what your Consumer Duty evidence could look like.