The Financial Conduct Authority (FCA) is set to introduce a new consumer duty to better protect users of financial services.
The new rules will help tackle harmful practises such as providers of financial services presenting information in a way that exploits consumers’ behavioural biases; selling products or services that are not fit for purpose; or providing poor customer support.
The FCA said it wants to ‘drive a fundamental shift in industry mindset’ by raising standards and helping firms to get products and services right in the first place.
The new rules will mean firms will have to place emphasis on supporting and empowering their clients to make good financial decisions and avoid foreseeable harm throughout the customer relationship.
Firms will be required to provide customers with information they can understand; offer products and services that are fit for purpose; and provide helpful customer service.
A consultation will be open until 15 February 2022 and the FCA expects to confirm any final rules by the end of July 2022.
Sheldon Mills, executive director of consumers and competition at the FCA, said: “Making good financial decisions is vital to financial well-being and trust, but too often consumers are not given the information they need to make good decisions and are sold products or services that do not offer the benefits they might expect. We want to change that.”
“We’ve been working to set a higher standard for firms, to put more of the onus on them to act in their customers’ interests and get their products and services right.’”