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Update on GapBack

FCAOn Friday 12 December 2014 the FCA published their remedies consultation for the GAP. Please click here to view the full report.

The consultation will run until the 13 March 2015 and the proposed implementation date for the remedies is 1 September 2015.

In the consultation the FCA confirm their beliefs that the process of selling GAP at point of sale impacts consumer buying behaviour and that there is a lack of transparency and comparability of GAP products in the market. They still firmly believe that the GAP market does not have effective competition and dealers have a clear point of sales advantage.

The FCA want to introduce 2 remedies.

  1. A deferred opt-in
  2. Improved information about shopping around

Deferred Opt-in

  • The FCA propose an opt-in starting at the point key information is given to the consumer. Dealers will have choice in where in the sales process this happens and the FCA have indicated that this can happen pre-vehicle order.
  • Deferment period will be 4 days
  • Deferral can be less than 4 days if the consumer waivers this period or initiates contact with the dealer to buy GAP themselves.

Information

Dealers will need to provide key information to the consumer for the deferred period to start. This will be:-

  • GAP premium – separated from all other prices such as the car
  • Main benefits, exclusion and limitations of the policy
  • The fact GAP can be bought elsewhere
  • Whether the GAP policy is optional
  • How the deferred opt-in works
  • Make clear that when GAP is sold with finance it can still be purchased elsewhere.
  • Information should be provided in writing

It would appear that the FCA are still wedded to an opt-in, although a much shorter one than has been talked about previously.

The NFDA are currently analysing the proposed remedies and likely impact on dealers, and will be responding to the consultation in due course. We will keep you updated as the consultation process progresses.

 

 

Posted by Sue Robinson on 19/12/2014