Consumer Duty Frequently Asked Questions(FAQs)

1. What is the FCA Consumer Duty

The Consumer Duty is a new set of rules and principles introduced by the Financial Conduct Authority (FCA) aimed at ensuring firms deliver good outcomes for retail customers.


2. When did the Consumer Duty come into effect?

31 July 2023 for new and existing products; 31 July 2024 for closed products.


3. Who does the Consumer Duty apply to?

All FCA-authorised firms involved in the manufacture, sale, or distribution of products and services to retail customers.


4. What are the key components of the Duty?

The Consumer Principle, three cross-cutting rules, and four outcomes (Products and Services, Price and Value, Consumer Understanding, Consumer Support).


5. What must firms do to comply with the Duty?

Assess outcomes, have governance in place, conduct reviews, and train staff.


6. Do firms need to appoint a Consumer Duty Champion?

Yes, usually a non-executive director or senior executive to ensure the Duty remains a top priority.


7. What role does the Board play?

The board must embed the Duty in governance and business strategies and produce an annual report.


8. What does 'good outcomes' mean?

Fair value, product suitability, clear information, and appropriate support.


9. How can we demonstrate compliance with the 'Price and Value' outcome?

Assess whether the price paid reflects the benefits provided and address any unjustified fees.


10. What is required under the 'Consumer Understanding' outcome?

Communications must be clear, fair, not misleading, and tested for effectiveness.


11. What are foreseeable harms?

Harms a firm can reasonably predict based on product knowledge and market dynamics.


12. How should we monitor outcomes?

Use management information (M.I.), feedback, complaints, and product reviews.


13. What happens if we do not comply with the Duty?

FCA can take supervisory or enforcement actions, including fines or redress.


14. Can customers sue firms under the Consumer Duty?

No, it does not create a private right of action.


15. Does the Duty apply to closed products?

Yes, from 31 July 2024.


16. How does the Duty apply to distributors vs manufacturers?

Manufacturers ensure product suitability; distributors ensure proper distribution.


17. How often should we review our compliance?

At least annually and when poor outcomes are identified.


18. What kind of M.I. should we collect?

Sales data, complaints, call stats, retention, vulnerable customer metrics, etc.


19. How can we embed the Duty into our culture?

Leadership tone, aligned incentives, communication, and accountability.


20. Have you appointed a 'Consumer Duty Champion' at Board level who, along with the Chair and the CEO, ensures that the Duty is being discussed regularly and raised in all relevant discussions?

Yes, a 'Consumer Duty Champion' has been appointed at Board level and the key issues are discussed at senior management and Board level. We ensure that the customer journey and good customer outcomes are central to the way we operate.


21. How are you embedding Consumer Duty principles into your business?

The Consumer Duty principle “a firm must act to deliver good outcomes for consumers” is being embedded into our product management lifecycle, to enable us:

1. Act in good faith toward retail customers.

2. Avoid foreseeable harm to retail customers.

3. Enable and support retail customers to pursue their financial objectives.


Fair Value Assessments and product reviews will be updated to ensure that we’ve taken into account the good customer outcomes we’ve identified as critical. As with the FCA regulations stated in PROD4, Consumer Duty will be at the forefront of our design, testing, approval, distribution and monitoring.


Alongside the Board oversight, we will be tracking Consumer Duty within our management review meetings. We will regularly review performance against the identified good customer outcomes using the management information we’ve identified as relevant for each area. Training will also be provided to all our employees to ensure they are knowledgeable and informed.


22. What are the most significant changes you believe need to be made to ensure you are delivering the four outcomes?

The most significant change is the way the management information (MI) is collected, extracted and reviewed. The aim of this is to create robust MI and customer insights to evidence that we are complying with the principle of Consumer Duty.


23. How will you communicate the results of your Consumer Duty ongoing monitoring?

We are updating our website with Consumer Duty information to provide our customers with additional useful resource. Here you may be able to access resources such as product information and our various services. We will also be able to provide any specific details required on request.


24. What expectations do you have of your partners in relation to the Consumer Duty implementation?

We are committed to working collaboratively with our partners to ensure that we provide the best customer experience. Our staff are knowledgeable about the products we provide and we will ensure that the product is suitable for the customer. We also expect that vulnerable customers are identified in order for any suitable adjustments to be made. Additionally, any fees and charges added to the product should be reasonable and should not affect the value of the product.


25. Who do I contact if I require further information?

Please contact our customer support team via findsupport@smartsendfinance.com or any of our communication channels available on the mobile app or contact us via the website.


26. Where can we get more information?

FCA website, Policy Statement PS22/9, Finalised Guidance FG22/5, and industry bodies.


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