As firms continue to get ready for the implementation of the Consumer Duty, the FCA is supporting firms through the transition with a programme of engagement, which includes setting out in letters the expectations of the Duty and arranging a series of regional in-person events[2] for specific groups of small and medium-sized firms.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said: 'We want to thank firms for the hard work they’re putting into embedding the Duty. We were encouraged to see many examples of good practice in our review of implementation plans and found that many firms are embracing the shift that the Consumer Duty brings.
'Putting good outcomes for customers at the heart of firms’ strategies and business objectives will build trust and modernise how we regulate financial services.
'Leaders have a key role to play here. We have a world-leading financial services industry which serves its customers, colleagues and shareholders well through competition, innovation and leveraging talent. We want to see boards and senior management further embed the interests of customers into their firms’ culture and purpose.'
The Consumer Duty is a cornerstone of the FCA’s three-year strategy[3]. It introduces a more outcomes-focused approach to consumer protection and sets higher expectations for the standard of care that firms give customers. The FCA also believes the Duty will lead to a simplified and less reactive form of regulator, which will allow firms to innovate and compete more effectively.
While the FCA’s work on the Duty pre-dates the cost-of-living crisis, it is particularly important as consumers face increasing pressures on their household finances. Even before the crisis, consumers were being asked to make an increasing number of complex and important decisions in a faster and increasingly complex environment. But the crisis underlines the need for high standards and strong protections. It is more important than ever that consumers can make informed, effective decisions, act in their interests and pursue their financial objectives.
Letters
The FCA has published letters sent to the following sectors:
- asset management, custody & fund services and alternatives[4]
- claims management companies (CMCs)[5]
- consumer investments[6]
- contract for difference (CFD) providers[7]
- credit brokers[8]
- credit reference agencies and providers of credit information services[9]
- credit unions[10]
- debt advice firms[11]
- debt purchasers, debt collectors and debt administrators[12]
- general insurance and pure protection firms[13]
- high cost lenders[14]
- life insurance[15]
- mainstream consumer credit lenders[16]
- mortgage intermediaries[17]
- mortgage lenders and administrators[18]
- motor finance providers[19]
- payments services and e-money[20]
- retail finance providers[21]
- retail banks and building societies[22]
Notes to editors
- The FCA recently published a multi-firm review[23] of firms' plans to implement the Consumer Duty.
- The FCA published final guidance[24] to provide firms with the information they need to implement the Duty.
- The Duty includes a new Consumer Principle that ‘a firm must act to deliver good outcomes for retail customers’.
- Where a firm operates in multiple portfolios, it should consider the content of all letters relevant to the firm’s business
- Sign up for Consumer Duty email updates[25].