NEW FCA CONSUMER DUTY TO REPRESENT AN INNOVATION IN THE INDUSTRY

The Financial Conduct Authority (FCA) have announced that they are introducing a new Consumer Duty to set higher and clearer standards to enhance consumer protection across financial services. Commenting on the announcement Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA) said “We support a regulatory framework that will protect consumers and help them make informed decisions when taking on financial commitments including car finance and insurance”. 

The new Consumer Duty will include requirements for firms to make it easier to switch or cancel financial products, to provide helpful and accessible customer support and to give clear information about the products being sold. Additionally, the Duty will focus on the diverse needs of their customers, including those in vulnerable circumstances.

Sue Robinson added, “We encourage clear and unambiguous customer information that can only improve the consumer’s experience and satisfaction with the products and services they are procuring. We also support initiatives that help consumers make better financial decisions particularly at a time when household budgets are stretched.”

The FCA is giving firms 12 months to implement the new rules.

Sue Robinson concluded, “We are however concerned that the Duty will increase compliance costs to firms that could be passed on to customers.  We are also concerned that the 12-month time frame for implementation is tight at a time when firms are facing major changes to the retail automotive sector and staff recruitment can be difficult”.