The FCA has identified an increase in firms developing proposals, such as Schemes of Arrangements, to deal with significant liabilities to consumers. This is particularly so in relation to redress liabilities. In response, the FCA has published a guidance consultation aimed at ensuring firms who seek to limit their liability in this way, or in similar ways, continue to comply with their responsibility to treat customers fairly.
The proposed guidance makes it clear that firms seeking to limit their liabilities should provide the best possible outcome for customers, and that this will include providing the maximum amount of funding possible to meet compensation claims by customers. The FCA also expects firms to inform it as soon as they are considering some kind of compromise to manage liability.
The guidance explains that the FCA will asses each firm’s proposal on a case-by-case basis and will use its regulatory powers, including enforcement action, where appropriate.
The deadline to respond to the consultation is 1 March 2022.