Credit Management September 2023

CMNEWS
A round-up of news stories from the
world of consumer and commercial credit.
Written by – Sean Feast FCICM
Survey highlights importance
of the FCA’s Consumer Duty
LESS than half of UK adults,
or 21.9 million people, had
confidence in the UK financial
services industry and just
36 percent agreed that
most financial firms are honest and
transparent in the way they treat them.
These are the shocking findings of
a report from The Financial Conduct
Authority (FCA) which found that
7.4 million people unsuccessfully
attempted to contact one or more of
their financial services providers in the
12 months before May 2022, with the
most vulnerable in society being most
adversely affected.
The FCA’s latest Financial Lives
survey coincides with the introduction
of the Consumer Duty which requires
firms to act to deliver good outcomes
for consumers and, in turn, help to
improve trust and confidence in the
financial services sector.
Under the Duty, firms now have
to provide helpful and responsive
customer service – for example, it
should be as easy to complain about or
switch and cancel products or services
as it was to buy them. They also need
to equip their customers to make good
decisions through communications
people can understand, provided at the
right time.
Further duties include the need to
provide products and services that
meet consumers’ needs and work as
expected, and an obligation to explain
and justify their pricing decisions. This
includes being able to demonstrate
that rates offer fair value.
Sheldon Mills, Executive Director,
Consumers and Competition at the
FCA said: “Times like this show why
it is important people get the support
they need as more people are likely
turning to their financial services
providers for help. Our Consumer
Duty will guide our ongoing work
to improve the way firms provide
customer support - getting through to
your provider is the starting point for
receiving help, so we will be working
with them to improve in this area.”
The FCA claims that action since
the start of the cost-of-living squeeze
has already led to an increase in the
amount of engagement lenders are
having with their customers. Following
conversations with firms and new
guidance set by the FCA, lenders
supported over two million mortgage
customers to manage their finances
in the past year, including through
budgeting tools, access to debt advice,
and tailored mortgage forbearance.
The Authority admits, however, that
there is still work to do: 4.9 million
people who used firm communications
to help them make a decision in the
12 months before May 2022 found it
did not help at all.
The FCA’s survey also found that
an increasing number of people
are choosing to use digital banking,
payments and other online services,
with almost nine in ten adults (88
percent or 42.9 million) banking online
or using a mobile app in 2022, up from
77 percent in 2017.
While there is an increasing number
of people regularly using digital
services, the FCA recognises that many
people are still heavy users of cash
(six percent or 3.1 million) and reliant
on face-to-face services. Through the
Financial Services and Markets Act,
the FCA will take on powers on access
to cash and will expect firms to ensure
that they meet all their customers'
needs.
See our article on page 22
Brave | Curious | Resilient / www.cicm.com / September 2023 / PAGE 6