Context
The FSCP has published its response to the FCA in about the FCA Consultation Paper CP26/23 Consumer Duty – scope and proportionality. The Panel has opted to respond to some of the questions posed in the Consultation, even though the proposals within it are centred on firms and seek to refine the application of the Consumer Duty.
Key points to note and next actions
The Panel:
- stresses that consumer protections and the foundational customer understanding, fair value, good service and support outcomes of Consumer Duty must be preserved.;
- welcomes clearer accountability for consumer outcomes across multi-firm distribution chains;
- asks that the operational cost savings released as a consequence of this CP’s proposals should be recycled to improve consumer value and benefits; and
- recommends greater clarity, in relation to the allocation of risk between firms in the distribution and/or manufacturing chain, on who the consumer complains to and how would they be able to determine this. The Panel asks how the consumer avoid being passed between, for example, the primary and secondary manufacturers.
In relation to the specific questions in the Consultation, the Panel comments specifically on two issues:
- The Panel suggest that both Pure Protection and Health Insurances are brought within scope of the FCA’s proposal as the protection was purchased when the consumer was resident in the UK (response to Q. 5).
- The Panel welcomes the FCA providing clarified guidance to firms to reflect that they may act differently to support customers in vulnerable circumstances depending on their role within the distribution chain with firms closer to the customer having more direct responsibility for identifying and responding appropriately to vulnerable customers’ needs (response to Q. 21).