Car finance providers said, for dealers, the new regime will focus on clear customer communications, affordability assessments and more uniform commission for car finance sold through brokers and dealers.

“The accompanying Consumer Credit sourcebook (CONC), which also comes into effect today, requires that lenders, brokers and dealers put treating customers fairly firmly centre stage and specifically cautions lenders against using differential commission schemes that are structured solely around volume and profitability incentives,” said Paragon Car Finance.

Julian Rance, head of Paragon Car Finance, said:  “As a lender, it is important that we develop products that are easy to understand, retain visibility and control over the pricing of our products to the end customer and ensure robust checks are in place within our application systems to assess affordability.”

Martin Parr, FCA readiness manager at Alphera, said: “The world is not going to come crashing down around us today.

“We are not going to see a consumer credit apocalypse. However, the industry is changing. When the FCA takes over from the OFT, there will be a significant shift in the way in which compliance is approached and we will see far more emphasis on the proper interpretation of the new regime.

“Motor retailers will have to put far more emphasis on proving compliance.

“As such, the electronic and paper trails need to be in place to show that the customer has been treated fairly at all stages and that customer needs have been placed at the heart of all business processes.

“A customer-centric approach, which puts the customer at the heart of decision-making process, will be viewed far more favourably under the FCA than one that is focused purely on profit.

“It is important, therefore, that dealers do everything within their power to create systems and processes which lend themselves to providing evidence of a cultural alignment with the fair treatment of customers.”

The FCA has confirmed it will be publishing a list of non-compliant firms on its website.