Here at ALA we are all for better regulation of GAP insurance, particularly in relation to how it is being sold by dealers and finance companies as an add-on product.
All the more satisfying then to see car dealer, Vertu Motors, halt sales of GAP insurance at two of its dealerships. The action came following the failure of an internal Financial Conduct Authority (FCA) compliance audit.
The Finance Director and Chairman of the compliance committee explained
That’s what you have to do to make it clear to colleagues that this stuff is real and matters and to comply with regulation.
In the interests of “Treating Customers Fairly” as per the FCA guidance, we believe that this kind of internal auditing is an excellent idea. It is important to ensure that customer’s being sold any kind of add-on by the dealer – but particularly Finance and Insurance products – are fully informed about what they are purchasing.
A large number of our customers tell us of their unpleasant experiences when buying their car, with dealers using various tactics to sell them lucrative add-on policies. These include their addition to the sale without the customer’s knowledge, pressure sales tactics, lack of information about alternative places to purchase GAP insurance and more besides. The FCA completed a lengthy review highlighting these issues and looking to update the regulation of dealers’ when selling add-on General Insurances.
Dealers often end up with a bad reputation so if they take the initiative themselves to stamp out poor practice within their businesses this can only ever be a good thing for them, the industry and, most importantly, the customer.
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