Bite-size: FCA reminds firms of Consumer Duty expectations during cost of living pressures
The FCA has issued a reminder that firms must continue to support customers proactively as financial pressure grows, particularly where consumers may now be facing difficulty for the first time.
The FCA has published a new statement reminding firms that rising pressure on household finances as a result of increasing costs for fuel, food and utilities means that firms should consider whether their current approach to supporting customer is still relevant.
While many aspects of the message reflect existing Consumer Duty and forbearance guidance, it is clear that the FCA will expects firms to take an active role in monitoring outcomes, identifying any foreseeable harm and taking action where products, communications and support arrangements are no longer meeting consumer needs.
The statement focuses on four core areas:
Products and services - firms should check products still meet customer needs as circumstances change and ensure that support is accessible if customers experience difficulty.
Price and value - firms should consider whether products still provide good value, especially for higher-risk or more vulnerable consumers. The FCA encourages flexibility where affordability becomes challenging.
Consumer understanding - communications should be clear, timely and tested to ensure customers understand any support available, key terms and potential consequences of inaction.
Consumer support - firms should avoid creating unnecessary barriers in support journeys, empower frontline staff to deal effectively with vulnerable customers and ensure escalation routes are clear.
The FCA also emphasizes the importance of considering customers' entire relationship with a firm where they hold several products, rather than looking at individual products in isolation.
How Auxillias can help
Auxillias helps firms undertake Consumer Duty reviews, develop vulnerable customer strategies, handle complaints and forbearance, prepare customer communications, provide governance oversight and ensure firms are operationally ready. We also assist firms to assess whether existing products, support journeys and monitoring processes remain appropriate as circumstances change.
Key takeaway
It is clear from the FCA's message that firms should not expect that Consumer Duty-related work is 'completed'. With continued financial pressure on consumers, firms should be regularly reviewing customer outcomes, adapting quickly where necessary and demonstrating the actions being taken to prevent foreseeable harm.
