Information on new consumer duty - November 2023

The Duty provides a powerful new tool for the FCA to drive delivery of good outcomes for retail consumers. In order to equip these colleagues and to embed the Duty, we have set up a central Consumer Duty Embedding team to support colleagues across the FCA. We also have a team of colleagues dedicated specifically to embedding the Duty in our regulatory work.

However, the additional resource is only part of the picture, as we expect all colleagues to incorporate the Duty into their regulatory work. To this end, all firm-facing colleagues are required to complete in-house Consumer Duty training, and all have access to extensive internal resources, further training, and support from the central team.

As such, we do not hold an exact size of the team investigating non-compliance with the Consumer Duty. This is because it is not possible to put a precise figure on the number of individuals that are using the Consumer Duty (the Duty) in their supervisory and enforcement work across the FCA or in the mortgage and protection market.

We do not hold the exact number of firms that have been or are being looked at post-Consumer Duty deadline. This is because the scope of the Duty is wide and applies to all firms with a key role in delivering retail customer and prospective retail customer outcomes, including those with no direct customer relationship. However, some examples of our engagement include our portfolio letters that all relevant firms received that set out the FCA’s expectations for firms implementing the Duty and the specific harms we want firms to address.

Our supervisory work is structured to ensure that firms likely to require the highest level of supervisory attention (based on factors such as size, market presence and customer footprint) are deemed ‘fixed firms’. All fixed firms have a dedicated team of supervisors and they are all conducting Consumer Duty work. In addition to this, we have committed to understanding how smaller firms are engaging with the Duty through an anonymous survey. This survey has a total of three waves, the first wave concluded before the Duty deadline and the second wave recently completed.  

We have also engaged with firms on the Duty in our Cash Savings market review, our fair value assessment on GAP insurance and Provision of Banking Services report.

As our supervisory and enforcement work is ongoing we will publish further details over the coming months with examples of good and poor practice. However, some of the work we have previously published includes a review of the implementation plans of larger fixed firms, to better understand firms’ approach to embedding the Duty within their businesses. In this review we identified many examples of good practice, and also examples where firms may need to improve their implementation approach. We found three key areas of focus for firms ahead of the Duty deadline; effective prioritisation, embedding of substantive requirements and working with other firms in their distribution chains.  

As mentioned earlier in question one, we also contacted every firm in scope of the Duty, via a portfolio letter setting out the FCA’s expectations for firms in implementing the Duty. This letter set out areas of focus for firms and our approach to supervising firms in that sector. We have also engaged with firms on the Duty in our Cash Savings market review, our fair value assessment on GAP insurance and Provision of Banking Services report.