New consumer duty proposals are a game changer, says StepChange
StepChange Debt Charity is pleased to see the Financial Conduct Authority taking a strong next step towards a much needed Consumer Duty for the financial services industry, in its consultation paper published today.
The FCA’s proposals set out a blueprint to reset expectations on the way firms think and act to ensure good outcomes for their customers. Firms have not always worked to actively ensure that people’s biases and vulnerabilities are built in to how they seek to ensure good outcomes, either at the outset or over the lifecycle of financial products. This paper calls time on a culture that pays too little attention to its customers’ interests.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, says: “The Consumer Duty, when it comes into force, will be something of a game-changer in terms of financial regulation. It will require firms to think beyond ticking a box to show they are treating customers fairly, and towards a far greater requirement to ensure that they are focused on delivering good outcomes for consumers and preventing harm.
“In a world of ongoing serious consumer debt problems, this is a really important distinction and a really meaningful change, especially for financially vulnerable consumers. It raises the bar on the care firms must take to ensure that products and practices benefit customers and not harm them, as is still too often the case now. This can only be good news both to ensure fair lending, and for the fair treatment of people experiencing financial difficulty.”