The Financial Conduct Authority has warned that it will take “robust action” against companies that don’t meet the limit for Consumer Duty.
With less than 90 days until the new consumer protection system starts, the watchdog has told businesses to make sure they are ready for the 31 July date.
Sheldon Mills, the FCA’s executive head of consumers and competition, said that firms that don’t follow the Duty or cause the most harm can expect to be punished quickly.
“Our supervisory and enforcement approach will be proportionate to the harm – or risk of harm – to consumers, with a sharp focus on outcomes,” he says. “We will prioritise the most serious breaches and act swiftly and assertively where we find evidence of harm or risk of harm to consumers. In some cases, firms can expect us to take robust action, such as interventions or investigations, along with possible disciplinary sanctions.”
The FCA has given firms four key areas to focus on, such as gathering proof that shows products offer fair value and making sure it is clear what to do if products don’t offer fair value.
Mills says that a recent review of firms’ fair value assessment models found that some firms aren’t ready for the new system and aren’t doing anything about a lack of technology resources.
“The Duty will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it,” he says. “The 52 million financial services consumers in the UK rely on the sector to deliver good outcomes, and should be even better protected from harm, particularly in these challenging economic times.”
