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Consumer Duty implementation findings

Updated: Feb 25

This week Sheldon Mills, the FCA Executive Director of Consumers and Competition, gave an update on the Consumer Duty, highlighting the progress firms have made since it came into force on the 31st July 2023, as well as areas for further improvement.


Under the Duty, firms must act to deliver good outcomes for retail customers, and are expected to continuously address issues that risk causing consumer harm.


Firms who fail to deliver good customer outcomes will fall under the scrutiny of the FCA, who will act accordingly.



Mr Mills reported that in the past six months many firms have already made significant improvements to deliver better outcomes for their customers. Some firms however still have more work to do to meet the FCA's expectations. As such, the FCA has published the findings of its review of firms’ Consumer Duty implementation. These findings are split into six key areas and include examples of both good and bad practice regarding the Duty to help firms continue to put their customers' needs first.


Areas of good practice identified include better customer communication, increasing customers’ understanding of products and services by use of simplified language or changing the presentation of content, additional support for vulnerable customers, enhanced transparency and accelerated business changes to deliver better customer outcomes.


In many firms all staff (including those at Board level) were aware that their actions and behaviour should focus on customer outcomes. Other firms were also found to offer fairer value to customers by increasing value received by savers and reducing fees.


Areas of poor practice (and improvement) include the need for better data and monitoring strategies, unfair charging customers for a service they are not benefiting from and undermining customers’ trust by pushing products or services that are too high-risk or complex.


In some cases staff were not trained well enough to have complex conversations with customers or to understand customers' circumstances when in financial difficulty.


The FCA recommends that firms review the findings and continue to make improvements in line with good practice. Firms that identify any gaps should look to address them.


Furthermore, firms are also advised to plan ahead for any changes they may need to make before 31st July 2024 when the Duty for closed products and services comes into being.


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