| Link(s): | FCA warns of impending Consumer Duty deadline | FCA Countdown to the Consumer Duty | FCA Consumer Duty: Findings from our review of fair value frameworks | FCA |
Context
With fewer than 90 days to go until the Consumer Duty comes into effect, the Financial Conduct Authority (FCA) urged firms to ensure they are ready for the 31st July deadline.
Key points to note
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, has warned that firms who ignore the Duty or who pose the most harm can expect swift action.
Mills stated that the FCA’s approach to enforcement will be proportionate to the harm or risk of harm to consumers, focusing on outcomes; noting that the FCA will prioritise the most serious breaches and act swiftly and assertively where it finds evidence of harm or risk of harm to consumers.
He also acknowledges the work undertaken by financial services firms to implement the duty and set out how it could boost the competitiveness of the sector:
“The 52 million financial services consumers in the UK rely on the sector to deliver good outcomes, and should be even better protected from harm, particularly in these challenging economic times.
The Duty will help the UK financial services industry remain world-leading proponents of financial services, as firms have to think harder about innovating and competing to find better ways to serve customers.
If applied correctly by firms, the Consumer Duty should help firms retain and attract customers and will enhance the competitiveness of our financial services sector.
The Duty will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.”
The FCA has also shared the findings from its review of firms’ fair value assessment frameworks, which highlights good practice and areas for further consideration.
The review found that firms had carefully considered the FCA’s price and value requirements, but that some firms have more work to do to meet the rules. The FCA has set out 4 key areas for firms to focus on which include collecting evidence that demonstrates products represent fair value and having clear oversight of actions to take if products do not provide fair value.
Next actions
None – for information and awareness.