Nisha Arora (Director of Cross Cutting Policy and Strategy at the FCA) has delivered a speech on the Consumer Duty and the next steps for firms. The speech highlighted the following examples of good practice identified by the FCA since the Consumer Duty took effect this summer:
- firms using simpler language in their customer communications and introducing more accessible formats to improve outcomes for vulnerable customers;
- firms being more upfront on their websites about product exclusions; and
- firms reviewing their fees with fair value in mind.
However, Ms Arora also stressed that the Consumer Duty remains a top priority for the FCA and that the work for firms to embed the Duty has only just begun. Firms need to:
- go back and review their implementation plans to check they’ve made the changes they set out to make and whether those changes go far enough;
- consider their data and monitoring processes and identify whether there is any other data that should be captured and tested; and
- consider their annual board report – this annual assessment should include the results of the firm’s monitoring of whether its products and services are delivering expected outcomes in line with the Duty. It should also include any evidence of poor outcomes identified and the board must agree the remediation actions in respect of those poor outcomes.
In terms of FCA expectations, the FCA will continue to test firms’ implementation and embedding of the Consumer Duty, including looking at and addressing the issues highlighted in the portfolio letters it sent to firms in February. Another early area of focus for the FCA will be looking at firms’ complaints data and identifying where the FOS upholds high numbers of complaints.
The FCA has also published two new webpages on the Duty:
- Consumer Duty resources – this provides links to key publications about the Duty together with links to news, portfolio letters, podcasts and speeches; and
- How we are using the Consumer Duty – this page sets out examples of how the FCA is using the Duty to set higher standards of consumer protection. For instance, it contains links to FCA’s work on:
- calling on insurers to take action following the latest fair value data;
- bank account access and closures;
- supporting consumers with pension transfers;
- lenders’ fair value assessments; and
- cash savings accounts.