UK Finance has published its response to the FCA’s second consultation on proposals for a new Consumer Duty. UK Finance welcomes the changes FCA has made since its first consultation (in particular dropping the private right of action) however, it says that significant issues still remain.
In particular, its members have concerns about:
- the implementation period – 9 months is too short given the need for firms to review current products, prices, policies, systems, processes and documentation and to amend and supplement them where necessary. UK Finance suggests the implementation period needs to be at least 2 yeas to allow firms enough time to comply.
- retrospection – it is inappropriate to apply the products-and-services and price-and-value outcomes, requiring terms and prices with which consumers agreed before the Consumer Duty came into effect to be revisited.
- interpretation by the FOS – there is a risk that the FOS may take an inconsistent approach.
UK Finance and its members want the Consumer Duty to succeed and are keen to continue working with FCA as it finalises its proposals.