The FCA has today issued a consultation on a proposed new ‘Consumer Duty,’ designed to ensure consumers of FCA regulated products receive a higher level of protection by requiring firms to adopt a new principle going beyond its existing standards of Treating Customers Fairly.
StepChange has argued for some time that a statutory duty of care is needed to protect consumers in financial services, and welcomes this approach from the regulator as a powerful step in the right direction.
Peter Tutton, Head of Policy, Research and Public Affairs at StepChange Debt Charity, said:
“Poor practice among creditors, particularly among firms providing high cost products, continues to cause harm to consumers and highlights the gap between the fair market we want to see and a market where consumers are exposed to poor practice when they are most vulnerable.
“We strongly welcome the FCA’s commitment to develop and take forward a strong consumer duty and will look at the detail of its proposals carefully. An effective duty has the potential to proactively drive real change and better protect vulnerable consumers.
“As the government takes forward its wider review of the financial services regulatory framework, there is a need to embed a strong duty of care in legislation requiring firms to operate with a ‘fair by design’ principle and not take advantage of consumer vulnerabilities, biases or constrained choice. “
Notes to editors
- The FCA’s press release can