A New Consumer Duty

 

The Financial Conduct Authority (FCA) has released its plan to improve how firms serve customers with a new Consumer Duty.

Firms will be required to put their customers’ need first. The final rules and guidance have been set to create higher and clearer standards of consumer protection, which includes customer communications being easy to understand, ensuring needs are met with the products and services, and dedicating helpful customer support when they need it.

The newest rules have been set into place to consider the needs, characteristics, and objectives of the customers.

 

What Is Changing for a New Consumer Duty?

• 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:
  • Products and services
  • Price and value
  • Consumer understanding
  • Consumer support
• Rules relating to the four outcomes we want to see under the Consumer Duty. These represent key elements of the firm-consumer relationship which are instrumental in helping to drive good outcomes for customers.

 

The Duty Will Include Requirements for Firms to:

• End rip-off charges and fees
• Make it as easy to switch or cancel products as it was to take them out in the first place
• Provide helpful and accessible customer support, not making people wait so long for an answer that they give up
• Provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than burying key information in lengthy terms and conditions that few have the time to read
• Provide products and services that are right for their customers 
• Focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction

 

Sheldon Mills, Executive Director of Consumers and Competition, said:

“The current economic climate means it’s more important than ever that consumers are able to make good financial decisions. The financial services industry needs to give people the support and information they need and put their customers first.

“The Consumer Duty will lead to a major shift in financial services and will promote competition and growth based on high standards. As the Duty raises the bar for the firms we regulate, it will prevent some harm from happening and will make it easier for us to act quickly and assertively when we spot new problems.”*

 

How Long Do I Have to Implement The New Consumer Duty?

The FCA is giving firms 12 months to implement the new rules for all new and existing products and services that are currently on sale.

For new and existing products or services that are open to sale or renewal, the rules come into force on 21^st July 2023. For closed products or services, the rules come into force on 31^st July 2024.

 

How Do I Prepare My Products and Services?

Make sure your prepared for the rule change in July 2023 with Sentience Automotive Solutions, the experts in selling more, for more, compliantly.

Click here to get enquire with Sentience Automotive Solutions.

 

 

Sources:

*The FCA’s Consumer Duty will lead to a major shift in financial services | FCA

PS22/9: A new Consumer Duty | FCA