FCA opens 11 Consumer Duty probes in three years
The Financial Conduct Authority (FCA) has opened 11 investigations into the potential breach of Consumer Duty since the rules came in three years ago.
The regulator said the number of investigations had “steadily increased” since the first was opened in August 2024, just over a year after Consumer Duty was applied to open products.
The 11 investigations relate to firms in the insurance, pensions, wealth management, consumer investments, peer-to-peer lending and claims management sectors.
The FCA said Principle 12 of the Consumer Duty, which states firms must “act to deliver good outcomes for retail customers”, should be “at the heart” of firms’ activities.
It suggested firms question if they were treating customers how they would expect to be treated, adding: “Firms should continually challenge themselves to make sure their actions are compatible with their customers’ interests and financial objectives.
“We will act where we find this has not happened.”
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Where the FCA has concerns, it will introduce assertive supervision, ranging from “conversation to the imposition of requirements”. If this addresses potential consumer harm, this may not lead to a formal enforcement investigation.
The FCA said it intervened 382 times in the last year.
Some of these interventions included requiring a claims management company to stop conducting regulated activities and getting other firms to sign an asset restriction voluntary requirement (VREQ).
The FCA said: “We expect firms to hold themselves to high standards. Firms should work to identify and prevent harm from occurring, and provide evidence of good consumer outcomes.
“We are pragmatic in our approach to the duty, and where firms do the right thing, we will work with them. However, we will not hesitate to take enforcement action where necessary.
“We all have a part to play in creating an environment in which consumers and firms thrive.”
Last week, the regulator consulted on the scope of the Consumer Duty to make the rules clearer.
