Comment on Consumer Duty

“It's no longer ok to make money at the expense of customers' ignorance or to try and trip them up with complexity. Firms need to prove that they are working to deliver good outcomes for their customers, and to prevent foreseeable harm. For some companies that will mean they need to tear up their existing business models and start all over again.

“The savings market is the perfect example of a market where banks have taken advantage of consumers in the past. After attracting savers in on great deals, banks have then cut rates again and again for customers that don't move their money. Rather than reminding customers that there are better deals to be had elsewhere, they have kept quiet and hoped customers don't notice. In a Consumer Duty world, they will need to make it easier to switch - and work harder to remind customers that there are better deals.

“The Consumer Duty also requires firms to prove that customers can understand their communications. For most firms, this will require a rewrite of every letter and Ts&Cs document they have. Most firms will not be where they need to be as the new rules come into place today - but over the next year we should see improvements across the board. Importantly, the Consumer Duty should make it easier for customers to complain and get redress when things don't turn out how they expect. Hopefully today's rule change will put an end to misselling scandals and mistrust in this essential industry - and will pave the way towards a world where people can open accounts, invest and buy insurances with confidence.”