We are consulting on measures to address risks that can arise from the way consumer credit firms pay or incentivise their staff.
We have completed a thematic review of staff incentives, remuneration and performance management with 98 consumer credit firms. From this sample we found that some firms have inadequate systems and controls to manage the risks of staff incentives. Additionally some of these firms had not recognised the potential harm to customers that their incentive schemes could pose. The key findings from our thematic review are explained in Chapter 2.
In this consultation we are proposing a requirement on firms to detect and manage the risks to customers arising from their remuneration or performance management practices. We also set out guidance to assist firms in identifying features of their incentive or performance management arrangements that might give rise to potential harm to consumers, and ways they can more effectively manage those risks.
This consultation affects firms that are engaged in credit-related regulated activity and are not subject to any of the existing remuneration codes (SYSC 19A – SYSC 19F). It may also be of interest to consumers and consumer organisations concerned with consumer credit activity.
Please send us your comments by 4 October 2017:
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After the consultation has closed we will consider feedback we have received. Depending on the nature of responses, we expect to publish a Policy Statement in early 2018.