With less than 90 days until the onset of the Consumer Duty, the Financial Conduct Authority (FCA) is urging companies to prepare for the 31st July deadline.
In a speech delivered today, Sheldon Mills (pictured), the FCA’s executive director of consumers and competition, issued a stern warning to firms that neglect the Duty or pose a significant risk, saying they could face immediate action.
“Our supervisory and enforcement approach will be proportionate to the harm – or risk of harm – to consumers, with a sharp focus on outcomes. We will prioritise the most serious breaches and act swiftly and assertively where we find evidence of harm or risk of harm to consumers,” Mills said. He also cautioned firms to anticipate robust action in certain instances, including interventions, investigations, and potential disciplinary sanctions.
However, Mills acknowledged the efforts made by financial services firms to implement the duty. He pointed out how it could enhance the competitiveness of the sector, stating that “if applied correctly by firms, the Consumer Duty should help firms retain and attract customers and will enhance the competitiveness of our financial services sector.”
He further elaborated: “The Duty will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it.”
As part of its support efforts, the FCA is sharing insights from its review of firms’ fair value assessment frameworks. The review discovered that while firms had thoroughly considered the FCA’s price and value requirements, some still have work to do to comply with the rules.
The FCA has identified four key areas for firms to concentrate on, including gathering evidence that demonstrates products represent fair value and maintaining clear oversight of actions to take if products do not provide fair value.
In light of the current cost-of-living crisis, ensuring consumers receive fair value has become more crucial. This should also enhance the competitiveness of the industry as firms endeavour to offer the best to compete for customers.
