The Financial Conduct Authority (FCA) announced the introduction of a new Consumer Duty on Wednesday, which is set to raise the standards for how financial firms treat customers.
The Duty will reportedly allocate higher and clearer standards of consumer protection across the financial services industry, with the move coming as part of the FCA’s transformation into a more assertive, data-led regulator.
According to the FCA, the new regulations will require financial firms to end rip-off charges and fees, make it as easy to cancel or switch products as it was to purchase them, and provide customer support in an acceptable timeframe so clients don’t give up and hang up on service representatives before receiving an answer to their question.
The Duty will also mandate that financial services provide timely and clear information for customers to understand products and offerings in full, rather than bury key information in long listings of terms and conditions that few consumers have the time to completely read.
In addition, the FCA confirmed businesses would need to focus on the diverse needs of their customers at every stage and interaction, including those in vulnerable circumstances.
Companies will reportedly have 12 months to implement the new regulations for products and services currently offered to customers, with an extension for closed book products 12 months later to give businesses time to bring older products up to the new rules.
“The current economic climate means it’s more important than ever that consumers are able to make good financial decisions. The financial services industry needs to give people the support and information they need and put their customers first,” said FCA executive director of consumers and competition Sheldon Mills.
“The Consumer Duty will lead to a major shift in financial services and will promote competition and growth based on high standards.”
“As the Duty raises the bar for the firms we regulate, it will prevent some harm from happening and will make it easier for us to act quickly and assertively when we spot new problems.”