FCA Proposes “Reset” In Consumer Protection
On Tuesday, the Financial Conduct Authority (FCA) set out plans for a “reset” in consumer protection that puts the responsibility on firms to prove good outcomes for customers.
The FCA has proposed that, from April 2023, firms must comply with a new consumer duty principle under which they must act to deliver good outcomes and value to customers.
“We want to see a higher level of consumer protection in retail financial markets, where firms compete vigorously in the interests of consumers. We also want to drive a healthy and successful financial services system in which firms can thrive and consumers can make informed choices about financial products and services,” the FCA said in a public consultation paper.
Currently, firms are required to treat their customers fairly and not mislead them. However, the FCA wants to take this a step further by pushing firms to show evidence of good outcomes, instead of just complying with product governance rules.
The FCA has acknowledged the new duty of care will only be successful if properly enforced and has already announced an internal makeover which will allow for quicker intervention.