Glossary · UK
What is Consumer Duty?
An FCA rule that came into full force in 2023 requiring financial firms to act to deliver good outcomes for retail customers, covering products and services, price and value, consumer understanding, and consumer support.
Full Definition
The Consumer Duty is a set of rules introduced by the Financial Conduct Authority (FCA) that came into force for new and existing products and services on 31 July 2023, and for closed products and services no longer sold or renewed on 31 July 2024. It sets a higher and more outcomes-focused standard of care that firms must provide to retail customers than the previous, more prescriptive rulebook. At its centre is an overarching principle that firms must act to deliver good outcomes for retail customers, supported by four specific outcomes firms must evidence: products and services are fit for purpose and target the right customers; price and value, meaning the price a customer pays is reasonable compared to the benefits they receive; consumer understanding, meaning communications are clear, fair and not misleading and genuinely help customers make informed decisions; and consumer support, meaning customers can get the help they need, when they need it, without unreasonable barriers such as excessive delays or convoluted cancellation processes. The Consumer Duty applies across almost the whole of financial services -- banks, mortgage lenders, insurers, investment platforms, pension providers and consumer credit firms -- and firms must monitor and regularly report on the outcomes their customers are actually experiencing, not simply confirm they have followed a process. It builds on and goes beyond the earlier Treating Customers Fairly principles, giving the FCA a stronger basis to intervene where products offer poor value or communications are difficult for ordinary customers to understand, and it has driven many firms to review legacy products, exit fees, and add-on charges that might not stand up to the new value assessment.