Consumer duty
The new ‘consumer duty’ sets higher and clearer standards of consumer protection across financial services. It requires firms to put their customers’ needs first. This is known as a new Principle 12. Firms have been required to apply the duty to new and existing products and services from 31 July 2023. If the consumer duty applies, to set a higher and more exacting standard of conduct, Principle 12 replaces:
•Principle 6 – a firm must pay due regard to the interests of its customers and treat them fairly;
•Principle 7 – a firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading.
The rules can be viewed at and the non-Handbook guidance at . The FCA has also published a ‘Dear CEO’ letter on implementing the duty in the debt advice sector.
1Key expectations of conduct under the consumer duty are explained further through cross-cutting rules.
2FCA, The cross-cutting rules set out how firms should act to deliver good outcomes for customers The cross-cutting rules require firms to act in good faith, avoid causing foreseeable harm and enable and support retail customers to pursue their financial objectives.