What is the Consumer Duty and how will it help remedy poor past practices? 

This policy has over 20 pages, comes with full version and document control and, contains fully editable content for different types of firms from FSMA, Payment Services and Consumer Credit permissions. This is the first commercially available template policy available in the UK in general release, created by the regulatory compliance innovators, Compliance Consultant.

Without repeating regurgitated news, that has been around since summer 2022, the FCA Consumer Duty provides clear standards of consumer protection across financial services and requires firms to empower and protect consumers to achieve good customer outcomes. 

The new Consumer Duty summary is quite short and has three key elements:  

1. The Consumer Principle - this reflects the overall standards of behaviour the FCA expects from firms. A very important point to note is that the Consumer Principle extends to firms that are involved in the manufacture or supply of products and services to retail clients, even if they do not have a direct relationship with the end customer. 

2. Cross-cutting Rules - these set out the key behaviours demanded by the Consumer Duty and make clear that the Consumer Principle requires firms to: 

• Take all reasonable steps to avoid causing foreseeable harm to customers 
• Take all reasonable steps to enable customers to pursue their financial objectives 
• Act in good faith

3. The Four Outcomes – these build on the Consumer Principle and the Cross-cutting Rules, representing, in the FCA’s eyes, the key elements of the firm-customer relationship: i.e. how a firm designs, sells and services its products and services, along with the key touch points along the ‘customer journey’. 

The FCA Consumer Duty Rules are, on the face of it, quite complex and time consuming in their implementation. Once you grasped the basics, much of it, when added to the Operational Resilience Planning conducted last year provides a huge amount of insight into how your business is running, should be run and protects itself in the future.

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