The Consumer Duty comes into force on 31 July for new and existing products and services that are open for sale or renewal. Read more about how firms should be preparing.
We published this news story ahead of the implementation deadline. However, the below 10 key questions remain relevant for firms to consider now the Duty has come into force.
The Duty is a significant shift in our expectations, and we’ve been pleased to see many firms working hard to meet these new, higher standards. Our recent firm survey found that the majority of firms in the sectors covered believe they are on course to fully implement the Duty on time. However some have more to do to meet the deadline.
It’s crucial that firms are asking themselves the right questions, to make sure they are on track and making the most of the remaining time.
We expect boards, or equivalent management bodies, to have clear oversight of Consumer Duty implementation plans. By this stage they should have identified any potential gaps or weaknesses in the firm’s compliance and developed a plan to remedy this.
Our finalised guidance (FG22/5) contains a range of suggested questions for firms to consider as they embed the Duty. With just 1 month to go until the Consumer Duty deadline, we’re highlighting 10 of these that firms could ask themselves.
10 key questions for firms to consider:
- Are you satisfied your products and services are well designed to meet the needs of consumers in the target market, and perform as expected? What testing has been conducted?
- Do your products or services have features that could risk harm for groups of customers with characteristics of vulnerability? If so, what changes to the design of your products and services are you making?
- What action have you taken as a result of your fair value assessments, and how are you ensuring this action is effective in improving consumer outcomes?
- What data, MI and other intelligence are you using to monitor the fair value of your products and services on an ongoing basis?
- How are you testing the effectiveness of your communications? How are you acting on these results?
- How do you adapt your communications to meet the needs of customers with characteristics of vulnerability, and how do you know these adaptions are effective?
- What assessment have you made about whether your customer support is meeting the needs of customers with characteristics of vulnerability? What data, MI and customer feedback is being used to support this assessment?
- How have you satisfied yourself that the quality and availability of any post-sale support you have is as good as your pre-sale support?
- Do individuals throughout your firm – including those in control and support functions – understand their role and responsibility in delivering the Duty?
- Have you identified the key risks to your ability to deliver good outcomes to customers and put appropriate mitigants in place?
These questions should help firms to reflect on their implementation of the Consumer Duty and identify gaps or areas for improvement. Firms can also expect to be asked questions like these in their interactions with us.
Our Consumer Duty page contains a wide range of resources to help firms understand our expectations and implement the Duty effectively. As well as the final rules and guidance, we have published materials including podcasts, webinars, speeches and information updates to address common queries. In our recent firm survey, 96% of respondents who had used our Consumer Duty publications said they found them helpful.
Once the Duty is in force we will prioritise the most serious breaches and act swiftly and assertively where we find evidence of harm or risk of harm to consumers.