The objective of the Consumer Duty is to stop consumer harms and ensure a more consistent standard of consumer protection for financial services users. This aligns with FCA business priorities 2021 – 2022 focused on consumer outcomes.
There is parliamentary and political appetite to address consumer harms (for example, as defined in the consultation, finding it harder to switch or get a better deal), particularly given the increase in vulnerable consumers because of the pandemic (as shown by responses to the Financial Conduct Authority’s (FCA) Financial Lives Survey 2020).
Elements of Duty
The purpose of the duty is to deliver better outcomes for consumers across the whole consumer journey and aims to set a higher standard of care and expectation than the existing set of principles and rules with a package of measures:
PIMFA welcomes extension of the Consumer Duty implementation timeline
PIMFA has welcomed the FCA’s decision today (27 July 2022) to agree to our recommendation to extend the period for firms to implement its new Consumer Duty for closed books by an additional 12 months. Under the FCA’s revised timeline firms will have until 31 July 2023 to implement the Duty for new and existing policies – an extension of three months – and a further 12 months from then – until 31 July 2024 – to implement the Duty for closed books.
Responding to the FCA’s policy statement, Simon Harrington, Head of Public Affairs at PIMFA, commented:
“The Consumer Duty has the potential to be a transformative piece of regulation which will, we hope, substantially improve how firms serve consumers and work towards ensuring they receive superior financial outcomes.
“But for that to be the case, as we have previously argued, firms need more time to implement the new regulations. We welcome the fact that the FCA has now recognised that such a transformative piece of regulation does indeed require additional time for firms to implement new systems and processes to comply with it.
“The decision to extend the implementation of the Consumer Duty to from 9 to 12 months for new and existing policies, and then another 12 months for closed books, is broadly in keeping with our recommendations to the FCA. We are pleased the Regulator has listened to the industry and demonstrated a willingness to work with us to ensure this new regulation works well from the very beginning. Our focus now will be on supporting firms to implement the Duty.”
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