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20th July 2018
FCA outlines the measures it will take to protect consumers and sets out when and how the organisation takes action
The Financial Conduct Authority(FCA) has today outlined the measures it will take to protect consumers and sets out when and how the organisation takes action. The Approach to Consumers document published this week sits alongside a new discussion paper on a Duty of Care and taken together are intended to ensure there are no gaps in protection for consumers in the financial sector.
The discussion paper explores if there is a need for a specific duty of care requirement for firms in financial services. It explores if a new duty of care could enhance good conduct and culture and provide additional protections for consumers.
If changes are required, the paper asks what those changes could look like and what the impact would be for consumers, firms and the FCA. It also explores what the possible alternative approaches to a new duty might be.
The Approach to Consumers sets out the FCA’s expectations, first published for consultation in 6th November 2017, on how consumers should be treated by financial firms and where the FCA will intervene if things are going wrong. It gives a further insight into the wide range of powers the FCA has at its disposal to ensure consumers are protected, particularly some of the most vulnerable people in society.
The paper sets out the FCA vision of what a well-functioning market looks like, when and how the FCA will act to protect consumers, and its policy positions on key issues.
Andrew Bailey, Chief Executive at the FCA,comments ”Consumer protection is absolutely central to the FCA’s purpose and Mission. Nearly everyone at some stage in their life will come into contact with a financial organisation and people need to know that they are being treated fairly and that the right protections are in place. Different groups of consumers have different financial needs, which will naturally change over their lifetime.
As we have demonstrated in the past, we will act to address harm or potential harm using the range of powers and tools at our disposal to protect consumers.
To ensure we provide the necessary protections and deliver good outcomes for consumers, we need to regularly review our approach, so we can reflect the diverse population of the UK and consumers’ changing needs in a rapidly-evolving and increasingly complex environment. The papers published today are part of this continuing work.”
When the FCA launched its Mission, it committed to publishing a series of documents that would explain its approach to regulation in more depth. These articulate how the FCA carries out its main activities, aiming to provide transparency to its thought process and decision-making.
The Financial Conduct Authority is asking stakeholders for comments on the Duty of Care paper by 2nd November 2018. IT will also consult early next year on guidance for firms to help them understand more clearly our expectations and requirements for dealing with vulnerable people.
Responding, Eric Leenders, Managing Director, Personal Finance at UK Finance, commented “We support the FCA’s vision for a functioning market that works well for customers.
At UK Finance we are delivering a significant programme of work to serve customers better, centred around the Vulnerability Taskforce report published in 2016.
We look forward to working closely with the FCA as they develop their approach to consumers. We will also work with them as they consider the potential introduction of a duty of care, alongside possible alternatives, to better understand how it would support the combination of strong regulatory and voluntary customer protections that are already in place.”