A new Consumer Duty regime Consumer Duty, what you

A New Consumer Duty Regime is Coming

In its new Consumer Duty proposals, the Financial Conduct Authority (FCA) wants to ensure a higher and more consistent standard of consumer protection for users of financial services and to help stop harm before it happens. It wants to secure a ‘paradigm shift’ towards more ‘outcomes-focussed regulation.’

The changes will impact all members that conduct FCA-regulated business in personal leasing or rental.

A new Consumer Duty, what you need to know.

Consumer Principle

Overarching Cross-cu ng Rules Firms must take all reasonable steps to: • avoid causing unforseeable harm •enable customers to pursue their financial objec ves Firms must act in good faith towards customers

Four Outcomes for the key elements of the firm-consumer rela onship: 1 Communica ons 2 Products and Services 3 Customer Service 4 Price and Value

There are three key behaviours required of firms, called the Cross-Cutting rules. Firms should:

1 take reasonable steps to avoid foreseeable harm to customers 2 take all reasonable steps to enable customers to pursue their financial objectives 3 act in good faith

Four outcomes are specified with detailed expectations for firm conduct

1 CONSUMER UNDERSTANDING: Consumers should be given the information they need, at the right time and presented in a way they can understand. 2 PRODUCTS AND SERVICES should be fit for purpose, designed to meet customer needs, and targeted to the right consumer. 3 Firms must design processes in a way that actively take

CONSUMER NEEDS into account. 4 Products and services should be fit for purpose and represent fair VALUE.

Immediate action is your best option

You don’t need to wait for us to give detailed rules – you can get a head-start now by making sure you have the right mindset, culture and data in place, and looking for gaps between where you are now and where you’ll need to be.

FCA Interim Director of Retail Lending, Brian Corr. Speaking at Credit Summit 2022 in March

14 May 2021: FCA introduced new guidance on Consumer Duty July 2022 Final rules published

July 2023 New Consumer Duty rules officially come into effect Two rounds of consulta on with industry FCA-regulated businesses to begin implemen ng new regime