Context
FOS has published a speech, delivered on 20th June 2023, made by FOS Chief Executive and Chief Ombudsman Abby Thomas at the Consumer Duty Implementation Summit organised by City and Financial Global.
Key points to note
- Thomas spoke about FOS’ role in the consume protection landscape and discussed how FOS is ready to look at complaints involving the Consumer Duty.
- In setting out her belief that OFS is ready for the Consumer Duty, she commented that:
- while the Consumer Duty moves towards regulation that’s more conceptual and less prescriptive, FOS is experienced in applying regulatory and legal developments to cases, as well as principle-based regulation;
- FOS has been looking to the FCA and its published rules and guidance to help it with the Consumer Duty’s implementation, just as the financial services industry has;
- FOS has talked to the FCA about its expectations, both as it was formulating its proposals and during the current implementation period;
- FOS does not expect to receive significant numbers of complaints involving the Consumer Duty until later in the year;
- FOS is creating sector-specific ‘directorates’ that cover particular areas, like investments, insurance, or banking;
- the directorates will be homes for specialist knowledge, making it quicker for financial businesses to get answers and insight. As the directories are closely aligned with industry sectors, FOS teams will be able to focus on the Consumer Duty’s impact on the types of complaint that they see in their sector;
- FOS is tasking each of these areas to consider the approach to sharing information about relevant cases that works best for them and the customers they serve;
- following the Consumer Duty, FOS may see more complaints about the use of products and services (rather than their sale or cancellation) – so consumers might tell FOS that firms should have done more to check that they were using them as intended;
- FOS recognises that the Consumer Duty can’t – and won’t – protect consumers from all harm – sometimes consumers will be harmed by circumstances that weren’t reasonably foreseeable, and many products contain risks which consumers can reasonably understand and accept if firms have followed the requirements.
- Thomas believes that, ultimately, the Consumer Duty will be positive for both consumers and financial businesses, and will:
- improve customer experience, financial awareness and understanding;
- encourage and enable financial businesses to develop new and better products and services; and
- increase confidence in financial services and – over time – reduce complaints.
Next actions
None – for information and awareness.