ACFO chairman John Pryor has welcomed new BVRLA guidelines, which include clarifying the rules on excess mileage charge complaints, but has urged leasing companies to go further.
The BVRLA put the guidance together in response to the Financial Conduct Authority's (FCA) review of the wider consumer finance industry’s approach to handling complaints.
Leasing companies have been increasingly looking at personal leasing as a growth market in the UK and finance provided through these deals is regulated by the FCA.
The FCA published an open letter in September 2017 to the chief executives of all consumer credit firms to highlight findings from the FCA that showed a failure to provide customers with information about the Financial Ombudsman Service (FOS), including the right to refer complaints to the FOS and a failure to provide clear explanations of the complaints process.
John Pryor, chairman of fleet representative body ACFO, told Fleet News: “This BVRLA fact sheet is good but all companies should already have something like this in place for all complaints whether they fall within the definition of a regulated complaint or not.”
Pryor said end of contract disputes cause a high number of complaints across all clients and he said there were signs of this worsening.
He said: “Leasing companies can and should do more here to ensure that drivers understand the rules, those rules are communicated to them at the outset (quote/order phase) and re-communicated at appropriate points throughout the contract right up to collection - this should all be done with the client to prevent the driver being surprised at contract end.”
Pryor also said leasing companies should have a clear process to manage charges and they must be fair and reasonable.
He said: “Drivers very rarely will be happy to pay anything but often they do not understand the process, the rules by which they will be measured and how costs are calculated.”
Complaints about excess mileage charges, delays in provision of finance quotes or documents, the failure to include maintenance within the finance agreement, the failure to provide finance or deals advertised on a firm’s website are no longer available are all likely to fall within the the scope of the FCA.
Amanda Brandon, BVRLA legal and policy executive, said: “The new complaints handling fact sheet is designed to support members, helping them to be more aligned to what the FCA is looking for.
“The majority of BVRLA leasing broker members already have robust complaints processes in place. However, in the past, they may have been focused on complaint handling, whereas we are encouraging members to learn from complaints, seeing the information gathered as a helpful resource to glean management information for business improvement and staff development to ultimately deliver better outcomes for customers.
“It’s not necessarily about changing processes, but more about making better use of the complaints process.”
Part of the rules the FCA is looking to enforce is on how companies look at the root cause of complaints and then take steps to remedy any problems.
The FCA said in its open letter that “a significant proportion” of companies had failed to carry out root cause analysis of complaints.
While the FCA is not expecting leasing companies to present their complaints process, they may be called on at random to evidence that a review has taken place.
The FCA’s statement guidance statement said: “Those with serious failings should expect formal action to be taken.”