Citizens Advice response to the FCA Consumer Duty consultation paper

Citizens Advice response to the FCA Consumer Duty consultation paper [ 180 kb]

At Citizens Advice, we offer free, independent, and confidential advice and information to anyone who needs it. In the past year, we have supported people with more than 136,000 financial services and financial capability issues. We have also observed first-hand the unprecedented impact of the coronavirus pandemic on household incomes. Towards the end of 2020, we estimated 6 million people had fallen behind on bills during the pandemic, building up around £1.6 billion in arrears. Regulators acted quickly to support those struggling, but the pandemic still exposed weaknesses in consumer protections, with some businesses taking the opportunity to exploit consumers. We also saw an acceleration in the digitisation of markets, which has developed over recent years, and which regulation has struggled to keep up with.

Against this backdrop, it is welcome that the FCA is considering how to deliver a higher level of protection for consumers in financial services markets. We fully support the aims and ambitions of the new Consumer Duty to deliver a significant shift in the approaches and culture of financial services firms. 

However, it’s crucial that the FCA demonstrates to firms how the Consumer Duty differs from existing guidance and principles, such as ‘Treating customers fairly’. For the Consumer Duty to deliver significant benefits, effective monitoring and enforcement will be vital.