Johnsons Cars Limited
Consumer Duty Issued: July 2023
From the 31st July Johnsons Cars Limited must operate under the three elements of the Consumer Duty as issued by the Financial Conduct Authority (FCA). These are.
1. An overriding principle where Johnsons Cars must act in a way to deliver good outcomes for retail consumers.
2. Across the board principles in the business where we must act in ways that support our customers by: -
Act in good faith toward retail customers
Avoid foreseeable harm to retail customers!
Enable and support retail customers to pursue their financial objectives.
3. We must aim to achieve the four outcomes the FCA want us to achieve for our customers.
We must review and scrutinise the products and services we provide to customers by proactive reviews of supplier’s products and provide governance of the products offered.
Offer products and services that are priced and fairly.
Ensure the consumer understands what they are buying or receiving.
Offer the customer support and aid them in reaching the correct outcome.
These duties apply across the full distribution chain, meaning we must be involved in the review of products, the sale of products, ongoing administration and management of the products or services offered to the retail customer.
Oversight and the Sales process
To meet the requirements of the Consumer Duty, we Johnsons Cars Limited must take proactive steps to ensure the principles above are met and customers are receiving good outcomes and we are taking steps to ensure they are achieved. Below we will detail the steps we will be taking.
Selection of financial products to retail.
Johnsons Cars Ltd will test all products it wishes to sell to retail customers to ensure they meet the principals above, they will not harm the customer financially, they are of good value and support consumers in reaching their financial objectives.
Adherence to CONC4.5.
Specifically, we must make it clear to customers that our staff know they are not providing independent financial advice.
We specifically confirm in our ‘Dealer declaration’ that we hove provide the customer with the necessary information relating to the existence of commission. In addition, this is supported by a general disclosure in our Status Disclosure on our website www.johnsonscars.co.uk.
We have a process in place to provide a customer with details of the total amount of commission we will earn should they ask you to disclose it.
Price and Fair Value
The FCA have made it clear that it is not their intention to set prices for products but rather as a retailer we need to ensure our prices and the costs of distributing a product and services represent fair value. We have tested this by looking at the cost of the product and services, the cost to deliver the product and service to the consumer, the marketplace for such products and services and the commission earnt. We have also tested the products or services to ensure we as a broker will in good time before a credit agreement is entered in to ask ourselves the question “in our knowledge if the amount of commission could or would have a material impact on the customers decision would we stop the sale of the product or service” If yes then the prices is unfair and should be changed downwards.
As part of the product and service selection process we will ask the product or service designer to demonstrate that the key terms and principles of a financial product are presented in clear and concise terms, with as much description to ensure it is clearly understood as to inform the retail customer well in advance of purchase.
We will ensure all staff who either sell to retail customers, oversee staff who will sell to retail customers and any other staff deemed to need the required training are trained. This will be provided via the SAF proficiency solutions platform, ITC training on APEX and any product providers platforms and resources. This will ensure all staff have suitable skills and knowledge to meet the principles above.
Customer feedback monitoring good outcomes.
We will receive numerous opportunities for customer feedback on numerous areas of our business, from manufacturer CSI results, mystery shops, Judge services returns, social media posts, customer complaints directly to us and our staff, business reviews with the product designers. This will give us the opportunity at every stage to ask are the products being seen as detrimental to the customer and potentially causing harm. We should then revaluate the products suitability and consider acting negatively to the principles listed above. Conversely if we have no adverse complaints this reinforces the products and services, we are selling to retail customers and are acting in accordance with the principles above and offering good outcomes.