Looking to ‘fundamentally improve’ how firms serve customers, The Financial Conduct Authority (FCA) is bringing in a new Consumer Duty.
At the core of the new standards is consumer protections across financial services, with it underlining the need for companies to prioritise customers.
Companies will have 12 months to ensure that they are fully compliant and implemented within how their firm works.
Sheldon Mills, Executive Director of Consumers and Competition, said on the changes: “The current economic climate means it’s more important than ever that consumers are able to make good financial decisions. The financial services industry needs to give people the support and information they need and put their customers first.
“The Consumer Duty will lead to a major shift in financial services and will promote competition and growth based on high standards. As the Duty raises the bar for the firms we regulate, it will prevent some harm from happening and will make it easier for us to act quickly and assertively when we spot new problems.”
Furthermore, it also underlined that clarity will be a boost in enabling firms to innovate with an incentive of enhancing the customer experience.
The Duty will include requirements for firms to:
- end rip-off charges and fees
- make it as easy to switch or cancel products as it was to take them out in the first place
- provide helpful and accessible customer support, not making people wait so long for an answer that they give up
- provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than burying key information in lengthy terms and conditions that few have the time to read
- provide products and services that are right for their customers
- focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction
