Are you up to speed with the new Consumer Duty that comes into force at the end of July?
Posted on in Business News , Cycles News
The new Consumer Duty comes into force on 31 July 2023 for new and existing products and services. The aim is to set higher and clearer standards of consumer protection and to require firms to put their customers’ needs first.
However, with less than a month to go, it’s crucial you’re asking the right questions to make sure you’re on track and making the most of the remaining time. To support this, The Financial Conduct Authority has been highlighting ten key questions that you can ask to help identify and remedy gaps or areas for improvement in your implementation of the Duty.
These are drawn from the questions in the FCA’s Finalised Guidance (FG22/5). You can expect to be asked questions like these in your interactions with the FCA, and they will expect your Duty champion and Chair to use these types of questions to guide senior level discussions.
The new rules comprise:
• 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 (see below).
• 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.
These outcomes relate to:
• products and services
• price and value
• consumer understanding
• consumer support
Our rules require firms to consider the needs, characteristics and objectives of their customers – including those with characteristics of vulnerability – and how they behave, at every stage of the customer journey. As well as acting to deliver good customer outcomes, firms will need to understand and evidence whether those outcomes are being met.