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FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

FOR THE USE OF MORTGAGE INTERMEDIARIES & OTHER PROFESSIONALS ONLY

Consumer Duty

What is Consumer Duty?


The Financial Conduct Authority (FCA) has introduced the Consumer Duty, which sets clearer and higher expectations for firms’ standards of care towards retail customers. The FCA views the introduction of the Duty as an opportunity to support innovation, to raise standards, and improve both consumer outcomes and trust in financial services

 

The Duty introduces a new Principle 12 in the FCA Handbook whereby relevant firms must “act to deliver good outcomes”. This is supplemented by additional Rules and Guidance, which firms must comply with by July 2023 for open and existing products and July 2024 for closed products.

 

Why has it been introduced?

 

By introducing an outcomes-based Duty the FCA hopes to drive culture and shift behaviour in firms by explicitly setting out a higher standard of care, extending rules on product governance and fair value (beyond the sectors they currently apply in). There will be a greater focus on identifying and removing harmful market practice that interferes in consumer decision-making.

The Consumer Duty will provide consumers with more protection, transparency and support overall.

 

Consumer Duty important dates

27 July 2022:

FCA Publishes

Consumer Duty Rules and Guidance

 

31 October 2022

Firm’s management must submit plan

Firms should have agreed their implementation plans at board level with evidence to ensure they are deliverable.

Consumer Duty guidance for firms

 

30 April 2022

Lenders' deadline to complete reviews to meet outcome rules for existing products and services covering price and value, products and service. TSB will share these with networks and DA’s in April.

 

31 July 2023

Firm's deadline for new and existing products or services. Evidence that new Consumer Duty rules to deliver good outcomes for retail customers are in place and workable.

Consumer Duty Implementation Plans (FCA)

 

31 July 2024

Implementation final deadline for lenders and firms for closed products or services.

By 31 July 2024, boards (or equivalent management bodies) should be confident their firm is complying with their obligations under the Duty and have identified any gaps or weaknesses in their compliance and implemented the actions to remedy this.

Where to find help with the Consumer Duty