Consumer Duty - Increased Consumer Protection

Consumer Duty - Increased Consumer Protection

As you may know, the FCA has published Consultation Paper 21/13:’ A new Consumer Duty’. Each month we will be breaking this down into what it actually means. One of the proposals is the Cross-cutting rules requiring three behaviours from firms as follows:

  1. Take all reasonable steps to avoid causing foreseeable harm to customers.
  2. Take all reasonable steps to enable customers to pursue their financial objectives.
  3. Act in good faith.

You will be expected to comply with these cross-cutting rules and behaviours across all of your activities, from high-level strategic planning to individual customer interactions.

The FCA proposal expects that these behaviours will be interpreted by firms in the context of:

  • The nature of the product/service offered (i.e., high levels of complexity will require further information/assistance for customers).
  • The relevant distribution chain.
  • The reasonable expectations of consumers for that
    particular service/product (i.e., where the added value marketed by the firm is to be delivered via customer service).
  • The specific characteristics of the customers (i.e.,