The UK’s Financial Conduct Authority (FCA) has confirmed a new set of rules designed to protect the interests of customers.
The regulator claims the new Consumer Duty will “fundamentally improve how firms serve consumers” and will “set higher and clearer standards of consumer protection” and “require firms to put their customers’ needs first.”
The duty will include the following requirements for banks:
- 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.
The original consultation proposed giving firms nine months to implement the changes, but this has now been extended to a year. For closed-book products, the deadline is July 2024.
Sheldon Mills, executive director of consumers and competition at the FCA said: “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.”
Download the finalised guidance here.