Consumer Duty, a set of new rules aimed at enhancing consumer protection in the financial services sector, has come into force as of 31 July.
These rules are set to significantly impact the way financial firms interact with their customers, aiming to ensure that consumers receive fair and clear treatment.
The key points of the Consumer Duty include the necessity for financial firms to provide support as and when needed, clear and comprehensible communications, and products and services that align with the needs of the consumer, offering fair value. Firms are now being closely monitored to ensure compliance with these rules, and those failing to meet the standards may face enforcement actions.
Under the Consumer Duty, firms are expected to be more transparent and honest, prevent harm to consumers, and actively support their financial goals. This means that customers can look forward to more accessible support, timely and clear information to make financial decisions, and a fair deal that focuses on individual needs rather than upselling unnecessary products or services.
Moreover, the rules are intended to protect consumers from being ripped off or facing unexpected costs, and special consideration will be provided to those in vulnerable situations, such as poor health or financial troubles.
These rules will apply to all new and existing products and services that are currently on sale. For older products no longer on sale, the rules will become applicable from 31 July 2024.
Should consumers encounter any problems with their provider or feel that the Duty’s standards are not being met, they are encouraged to raise a complaint with the provider. In cases of dissatisfaction with the provider’s response, the Financial Ombudsman Service can be contacted.
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