New Consumer Duty a “watershed moment” in consumer protection

Money Advice Trust responds to FCA’s new ‘Consumer Duty’

The FCA has today published its final policy statement on its new Consumer Duty, which the Money Advice Trust has called “a watershed moment” in consumer protection in financial services.

The new rules are intended to further raise standards of consumer protection in financial services and to help stop harm from occurring in the first place. Firms have twelve months to implement the Duty for all new and existing products and services.

Whilst the charity has welcomed the new rules, they have urged the regulator to closely monitor firms’ progress in meeting its standards and to take swift action if any fall below their expectations.

The charity, which runs National Debtline and Business Debtline, has been working with firms to improve their support for customers in vulnerable circumstances for over ten years. During this time they have trained over 300 creditor organisations and 30,000 creditor staff.

Joanna Elson CBE, chief executive of the Money Advice Trust, said:

“The introduction of a new consumer duty is a watershed moment in consumer protection in financial services and builds on the FCA’s work, in recent years, to improve support for people in vulnerable circumstances.

“At a time when millions of peoples’ finances are under huge strain, I am encouraged by the regulator’s emphasis on higher and clearer standards of protection, which should provide greater clarity to consumers and firms alike. As we have seen in our vulnerability training we run with creditors, there is a willingness from firms to improve their support for customers, and many will be able to build on this existing work.

“Preventing harm from occurring in the first place, however, will require a proactive approach from both firms and the regulator. For firms, this will need to include applying inclusive design principles at the outset of any new product. And the FCA will need a robust process to stop poorly designed products from entering the market in the first place and to take swift action if and when harm does occur.

“We look forward to working with firms to achieve these aims and to meet the standards required of them.”