UK Financial Conduct Authority Supports Firms Through The Transition To Implementing The Consumer Duty

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. 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 today: 

• Asset Management, Custody & Fund Services and Alternatives
• Consumer investments
• Credit reference agencies and providers of credit information services
• General Insurance and pure protection firms
• Life insurance
• Mainstream consumer credit lenders
• Mortgage lenders and administrators
• Retail banks and building societies

 Other sectors will receive letters very shortly, which will be published here. 

• Credit Unions
• Debt advice firms
• Debt purchasers, debt collectors and debt administrators
• Mortgage Intermediaries
• Motor Finance providers
• Payments Services and E-Money
• Retail Finance providers
• Credit brokers

Background

1. The FCA recently published a multi-firm review of firms' plans to implement the Consumer Duty.
2. The FCA published final guidance to provide firms with the information they need to implement the Duty.
3. The Duty includes a new Consumer Principle that ‘a firm must act to deliver good outcomes for retail customers’.
4. Sign up for Consumer Duty email updates.