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Consumer Duty - what you need to know

FCA sets out higher expectations for how consumers are treated by financial services companies


At the end of July 2023 rules for all new products and services and all existing products and services came into force. 


You will have received communications from your finance provider about the next stages of the FCA's Consumer Duty implementation. We've summarised the key points below.


Please also see our important guide which will help you navigate the expectations placed upon retailers.


What is Consumer Duty?


The FCA have recently set out higher standards for how consumers are treated by financial service companies, which state that a firm must act to deliver good outcomes for retail clients.


ACT's preferred retail finance partner is V12, which is part of Secure Trust Bank Group, put their customers at the heart of everything they do and ensure that customers are treated fairly.


Consumer Duty requires due diligence from the start to the finish of the process which means that some changes will affect you, the retailer.


What does this mean for me?


There are 4 key outcomes:


  • Products and Services
  • Price and Value
  • Consumer Understanding
  • Consumer Support


The FCA outlines that authorised businesses (yourself and your finance provider) should provide products and services that are designed to meet customers’ needs, that provide fair value and help customers achieve their financial objectives and which do not cause them harm.


Financial products should be right for the customers you are selling them to


  • You should be confident that finance products are suitable for your customers and you should ensure that your customers don’t feel like your proposed financial products are their only option for payment.
  • You should ensure that the price the customer pays for a financial product or service is reasonable compared to the overall benefits they get.
  • You should ensure that customers have all the information they need, clearly presented and in the right format, at the right time to make a decision.
  • You should be supporting every type of customer through every step of their financial journey
  • You are required by the FCA to have a Vulnerable Customer Policy that should ensure that you do not create barriers for customers that are looking to proceed with a financial product. You should also ensure that you do not disadvantage particular groups of customers.
  • You are required to have Terms and Conditions in place that meet the minimum legal requirements set out in the Consumer Right Act 2015.