FCA Strengthens Protection for Vulnerable Customers: CP21/36: A new Consumer Duty
The Consultation Paper (CP), CP21/36, maps out the FCA’s current stance in relation to the UK’s new consumer duty. With the introduction of the new Consumer Duty policy, the FCA aims to set the highest possible level of consumer protection particularly in the retail financial markets. This would require companies to significantly change their behavior and culture towards their customers and vividly emphasize their actions on their consumer’s best possible interests.
Why is Consumer Duty being proposed?
Consumers may not always receive the expected products or services due to the way that the financial services markets operate. The exploitation of market conditions means that consumer’s might get negatively affected and their ability to make good judgments may be adversely influenced. In other words, consumers, particularly those found in vulnerable circumstances face the greatest risk of harm by firms who do not consider their needs and who do not prioritize good consumer outcomes.
|Common practices which can cause consumer harm:||
|Where consumers endure harm, they might:||
Firm requirements under consumer duty:
Under the consumer duty, a firm will be required to:
- evaluate their actions and the effectiveness of such
- rather than hinder results, act to support, enhance and achieve them
- ask questions of themselves as to whether their products and services deliver the best possible outcomes to their consumers
Numerous regulatory tools will be implemented by the new consumer duty policy which would be utilized to assemble the FCA’s tactical intention of making financial markets work efficiently. The ideal environment would be one that would help consumers be better equipped and attain good results from financial services firms.
In result, the new Customer Duty enhances the importance of customer care for these ‘vulnerable’ consumers and makes sure that the outcomes that the receive align with the FCA’s recent publish ‘guidance on the fair treatment of vulnerable consumers.’
How can Complyport assist Consumer Duty compliance?
Being at the forefront of compliance and regulation, Complyport can assist firms in meeting their responsibilities under the FCA’s consumer duty requirements. Depending on your firm’s progress in this space, Complyport can provide a health check on your firm’s consumer duty principles and their effectiveness. Within this we would look at your firm’s products, how they are marketed to and accessed by your customers and your complaints handling procedures, root cause analysis and remedial action plans.
Following this assessment, our experienced compliance consultants can help your company put in place the right policies and procedures to ensure you are meeting the on-going consumer duty requirements. Additionally, our team can review your staff’s skills and capabilities when it comes to consumer duty, vulnerable customers management, Treating Customers Fairly (TCF) and staff conduct to highlight any knowledge or skill gaps so as to implement & deliver a suitable training plan.
If you are interested in how we can support you with consumer duty compliance, please contact Jonathan Greenstein now on firstname.lastname@example.org.
Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
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