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FCA regulations on prescribed information ahead of GAP sales

Customers deserve to know exactly what they are buying and it is always good practice to talk them through any financial policy they wish to purchase with their new vehicle.

Now the FCA is making it compulsory for all dealers and service providers to fully explain financial products before customers decide to buy. Regulations are being introduced to ensure customers receive wide-ranging GAP insurance pre-sale information to help them make more informed decisions and allow them to compare policies.

For more information about the FCA upcoming regulation changes – coming into effect 1^st September 2015 – download our latest FREE eBook: Get ready for FCA regulation changes.

Vital information

From 1^st September 2015, the FCA expects all dealers and service providers to supply customers with the following presale information:

• The total cost of the GAP policy, separate from any other prices;
• The GAP policy’s features and benefits, exclusions and limitations;
• Cross-references to any relevant policy document provisions;
• The fact that they can buy GAP insurance elsewhere and from other providers;
• The duration of the GAP policy;
• Whether the GAP policy is optional or compulsory;
• When the GAP contract can be concluded by the firm;
• The date this information was provided to the customer.

The FCA has also stated that the information must be conveyed clearly and accurately as well as in writing (or another durable medium). The information must also be drawn to the customer’s attention and identified as important for them to read and understand. 

Deferred sale

The requisite supply of information is vital to another of the FCA’s regulation changes, designed to give customers a better buying experience and enhance competition in the UK GAP market. From September, there must be a minimum of two “clear days” between the supply of the above information and the conclusion of the GAP insurance sale.

Further information on the FCA’s deferred sales regulation changes can be found in our FREE eBook: Get ready for FCA regulation changes.

This combination of changes will give customers time to review the product they are buying and find an alternative supplier if they wish. The changes will help build confidence in the financial services sector and ensure customers are buying the best available products.

Keep visiting our blog for advice and guidance on what dealers should be doing to prepare for the FCA changes in September 2015.