7.08.23

Consumer Duty sets higher standards for financial services customers

Consumer Duty changes for financial services firms

On 31 July 2023, new rules came into force for financial services firms. The new rules, known as the Consumer Duty, set a higher standard of consumer protection in financial services.

The Duty means clients and consumers should get: 

• the support they need, when they need it 
• communications they understand 
• products and services that meet their needs and offer fair value 

What the Consumer Duty means for the client 

Under the Duty, firms should be open and honest, avoid harm, and support the customer to pursue their financial goals. They should expect: 

• helpful and accessible customer support, so it’s as easy to sort out a problem, switch or cancel their product, as it was to buy it in the first place
• timely and clear information they can understand, so they can make good financial decisions. This means important information shouldn’t be buried in lengthy terms and conditions
• providers to offer products and services that are right for the client, rather than pushing products and services they don’t need
• products and services to provide fair value. This should mean the client won’t be ripped off or have to pay costs they didn’t expect. But while their provider should offer a fair price, it doesn’t mean that it will be the best deal, so they should still shop around
• firms to consider if their client is in a vulnerable situation when dealing with them. This could be due to poor health or financial troubles, for example

These rules apply to all new and existing products and services that are currently on sale. For older products that are no longer on sale, the rules will apply from 31 July 2024.

Cox Mahon has always subscribed to putting our customers front and centre of everything we do, and this new Duty means that the regulator can now take action against those firms that aren’t following the rules. Cox Mahon is authorised and regulated by the Financial Conduct Authority and is a member of the British Insurance Brokers’ Association.

For more information – Consumer Duty sets higher standards for financial services customers | FCA
https://www.fca.org.uk/news/news-stories/consumer-duty-higher-standards-financial-services

Taken from FCA and contributed by Nina Petty CII