As the avid readers of you will note, back in December 2021, I wrote about the Financial Conduct Authority’s (FCA) new Consumer Duty, advising you to keep an eye out as this new duty was on its way.
The FCA produced in July 2022 their Policy Statement PS22/9 A new Consumer Duty Feedback to CP 21/36 and final rules https://www.fca.org.uk/publication/policy/ps22-9.pdf, a mere 161 pages for you to digest! In this policy statement, the FCA sets out the final rules and guidance for a new Consumer Duty that will set higher expectations for the standard of care firms give consumers.
The rules the FCA will be implementing will come into force on 31 July 2023. Hopefully, this will give firms sufficient time to get to grips with the changes. We suggest you contact your product and service providers that are FCA regulated to ensure you are aware of these changes.
In the policy statement, the FCA has been very clear as to what they expect:
Setting higher standards and putting consumers’ needs first is central to our strategy – and the cornerstone of this is the Duty. We want to see a higher level of consumer protection in retail financial markets, where firms compete vigorously in consumers’ interests. Firms need to understand their customers’ needs and to have the flexibility to support them with certainty of our expectations, so they get good outcomes.
The FCA has introduced new rules comprising:
• A new Consumer Principle that requires firms to act to deliver good outcomes for retail customers.
• Cross‑cutting rules providing greater clarity on our expectations under the new Principle and helping firms interpret the four outcomes (see below).
The cross‑cutting rules require firms to:
– act in good faith
On average 55 vulnerabilities are identified daily.
What can I do?
Review your organisations priorities and ask ‘can we afford a breach?’. What do I do during an incident? Who do I involve? When do I involve the ICO?
If you’re unable to answers these questions, you need help from the experts.
– avoid causing foreseeable harm
– enable and support retail customers to pursue their financial objectives
• Rules relating to four outcomes we want to see under the Duty. These represent key elements of the firm‑consumer relationship which are instrumental in helping to drive good outcomes for customers.
These outcomes relate to:
– products and services
– price and value
– consumer understanding
– consumer support
The FCA has also said how they will measure the success of the new duty, and one of the ways will be to monitor the Financial Ombudsman Service’s (FOS) final decisions on complaints about fees, charges, or inappropriate product or service sales.
Therefore, you must seek Lawgistics advice for any complaint where the customer has the potential to refer the matter to the FOS, as the last thing you want is the FCA breathing down your neck!!
