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StepChange says FCA consumer duty will create valuable cultural shift

27 July, 2022

StepChange Debt Charity warmly welcomes the FCA’s confirmation of its final approach to implementing the new Consumer Duty that will enshrine in regulation the new principle that ‘a firm must act to deliver good outcomes for retail customers’.

Although this has previously been implicit in FCA regulation, its clear and unequivocal new status at the centre of FCA principles and rules will mean that firms will need to demonstrate a clear focus on how all their actions put the interests of consumers front and centre. This will help to reduce harm to financial consumers, including when they experience financial difficulties and debt.

Peter Tutton, StepChange Head of Policy, Research and Public Affairs, said:

“StepChange has always believed the Consumer Duty has the potential to be a game-changer, requiring firms to think beyond compliance box ticking and embedding a far richer focus on preventing harm and delivering good outcomes for consumers. We’re pleased that the FCA’s final decisions on implementing the new duty will embed these objectives even more fully than in the original consultation. This valuable cultural shift will have consequences not just for regulated firms but also for the FCA itself, and we look forward to working constructively across the credit market to help support it.

"With the FCA now putting greater emphasis on embedding true accountability within firms and monitoring outcomes, financial services consumers will in future be better protected from harm, including the risk of reasonably foreseeable debt problems or product features that exploit them. In the meantime, it’s worth remembering that paying due regard to a customer’s circumstances has always been the regulator’s expectation of firms; the implementation period should be seen as an opportunity to bolster good practices and culture.”

Regulated financial firms (including StepChange Debt Charity, which is itself authorised and regulated by the FCA) now have a year to fully embed the duty for new and existing customers, and a further year to apply it to any customers on closed book products that are not open to new customers. StepChange will be seeking to review and if necessary take steps to embed any new requirements to meet the duty as fully as possible as quickly as possible.

Notes to Editors

  1. More embargoed info on the FCA’s consumer duty policy statement and guidance can be found here

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