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Addressing Vulnerability: An Action Plan for Car Dealerships

Updated: Jun 9, 2023

As the Consumer Duty regulations come into effect on the 31st of July 2023, understanding and addressing vulnerability is a central component of these new requirements. In this context, vulnerability refers to any situation where a customer could be at a disadvantage when engaging with the marketplace. Given the complexities of vulnerability, it is essential for car dealerships to have an action plan that helps identify and address these issues. In this article, we'll present a step-by-step plan to guide your dealership in effectively managing and supporting vulnerable customers.



Step 1: Identify Vulnerability Characteristics


The first step in addressing vulnerability is to identify the potential characteristics that may put a customer at a disadvantage. This might include financial instability, limited understanding of complex automotive and finance terms, language barriers, disabilities, or any unique life circumstances. Make sure to gather as much information as possible through surveys, customer interactions, and staff observations.


Step 2: Assess Potential Impacts


Once the characteristics of vulnerability have been identified, it’s time to assess the potential and likely impacts these might have on your clients. For example, a language barrier could lead to misunderstanding contract terms, while financial instability could impact the customer's ability to meet payment deadlines.


Step 3: Review Existing Support Systems


Next, evaluate your current systems and strategies for supporting vulnerable customers. Ask key questions: How are you currently assisting clients with characteristics of vulnerability? Are these systems effective? Are staff members fully trained and equipped to provide the necessary support? This stage is about acknowledging what's already working well and identifying areas for improvement.


Step 4: Implement Necessary Changes


Based on your assessments, it’s time to implement the necessary changes to better support vulnerable customers. This might involve enhancing staff training, modifying payment options, simplifying contract language, or even implementing new systems or processes. And remember that keeping records is essential – and should always be done with your consumers’ consent.


Step 5: Monitor and Review


Finally, it's essential to monitor the effectiveness of the changes made and continuously review them. Regular assessments ensure that your strategies stay relevant and continue to support your vulnerable customers effectively.


 

Below is a practical checklist to aid this process:

  1. Identification: Have you identified all possible vulnerability characteristics amongst your customer base?

  2. Assessment: Have you assessed the potential impacts of these vulnerabilities?

  3. Support Systems: Have you reviewed your existing support systems and identified areas for improvement?

  4. Implementation: Have you implemented necessary changes to better support vulnerable customers? Are your staff confident int eh training they have received?

  5. Monitoring and Review: Do you have a process in place to regularly monitor and review the effectiveness of your strategies?


Remember, the goal here is not just compliance with Consumer Duty standards, but also creating a dealership environment where all customers feel valued, respected, and well-supported. By following this action plan, your dealership will be better prepared to identify, understand, and address the vulnerabilities of your customers, which in turn will enhance customer satisfaction and loyalty.

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