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FCA-And-Leasing

18/02/2015

How will the Financial Conduct Authority stamp out bad leasing brokers?
On April 1st last year, the FCA stepped in to regulate the online leasing industry. But what rules have they brought in and how will they affect the consumer?
FCA Car Picture

Despite finance houses and manufacturers trying to clamp down on rogue agents trading in contract hire, leasing and finance in recent years, the “Bedroom Broker” became fairly common practice across the internet. Leasing companies were left to their own devices when it came to misleading advertising and even taking “deposits” when they weren’t warranted.

FCA Rules


On April 1st 2014, all leasing brokers had to apply to the Financial Conduct Authority for an interim licence if they wished to continue trading, as the old Credit Broker Licences previously granted by the Office of Fair Trading became invalid.

In the same way as the insurance industry, motor traders will now need to be fully approved by the FCA if they wish to continue with their business past the interim permission stage (some companies may decide to act as an official “appointed representative” instead of getting full permissions of their own).

Why the leasing industry needed regulating


The main reason that the leasing industry needed to be regulated was to protect the consumer – a number of problems could occur under the previous laws that could be of serious consequence to individuals in particular if deals went wrong.

For example:

> No fall-back for customers when cars were delayed
> Leasing brokers ceasing to trade, leaving people and businesses ‘high and dry’ (possibly along with money paid in good faith)
> “Deposits” being kept in the event of cancellation
> Deliberately misrepresenting advertising luring customers in

How to check that your leasing company is reputable


It is now easy to check that your broker is reputable by checking the FCA Register (http://fca-consumer-credit-interim.force.com/CS_RegisterSearchPageNew); all businesses on this register will have passed the FCA’s vigorous initial checks.

There were a lot of brokers who didn’t even apply for an interim licence and over time, the choice of internet leasing companies will no doubt decrease. But this will be good news for the consumer, as they will know that they will be treated fairly in any event by the remaining approved companies.

There has been a lot of paperwork and compliance involved for all reputable dealers and motor traders, but in general, the industry is in full support of the good work that the FCA is doing.

Ultimately, the consumer always deserves a good, honest deal and customer service to match – at Car4Leasing, we feel that this is something worth celebrating.

You can browse with confidence on our website in the knowledge that everything advertised is genuine and the team behind the website are here to support, advise and guide you along the journey to taking delivery of your new vehicle.

For more information, call us on 0844 414 8144 or email sales@car4leasing.co.uk today.

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