Blog
Opt-out selling to be outlawed for customer benefit
The Financial Conduct Authority (FCA) plans to outlaw opt-out selling in the financial services market. What does that mean for your dealership? Customers will have to proactively decide whether they want to sign up for aftercare products such as warranty.
The changes are designed to protect customers and build trust in the financial services sector. Of course, it is always best practice to fully inform customers of what they are signing up to. Not only will it ensure they are happy with their purchase if they do sign on the dotted line but it will create trust and help boost your retention rate.
To learn more about putting customers first, download our FREE eBook: Putting Customers at the Heart of your Business.
Why is the FCA acting now?
Following a market study into the general insurance add-ons industry, the FCA found that opt-out selling can result in consumers purchasing an insurance product they’re not aware of or that they don’t need.
Christopher Woolard, Director of Strategy and Competition at the FCA, said: “This is about ensuring consumers can make the right decision on what add-on insurance they do or don’t need. Forgetting to untick a box at the end of a purchase is not making an informed choice.”
The ban will apply to any add-on sales of regulated and unregulated products. The FCA also wants firms to provide consumers with appropriate and timely information, encouraging the introduction of common products early in the sales process.
Planning on reviewing your sales processes? Sign up for a FREE Dealer Health Check with Car Care Plan.
What else is the FCA proposing?
The FCA is introducing tougher regulations around staff incentives to ensure dealerships and other financial service providers are not chasing bonuses and targets at the customers’ expense. It is hoped these changes will further ensure customers are getting a fair deal when it comes to purchasing financial aftercare products.
Download our FREE eBook to learn more about the FCA’s regulation changes around staff incentive schemes.