LONDON – Some of Britain’s financial firms won’t be ready to comply with a “step change” in consumer safeguards from July unless they accelerate preparations, the Financial Conduct Authority said on Wednesday.
The new ‘consumer duty’ rules set higher standards on financial firms to avoid ripping off customers.
Regulators want to draw a line under costly mis-selling scandals going back to endowment mortgages in the 1980s and payment protection insurance in recent years.
The rules apply on July 31 to new and existing products or services that are still being sold or renewed, and a year later to products and services already sold but no longer on offer.
“For firms which are further behind in making the necessary changes, there is time to put that right and for them to show they are acting in the spirit of the new Duty,” said Sheldon Mills, FCA executive director for consumers and competition.
Firms must not be over-confident that existing consumer protection policies will be adequate, and work with other firms in their distribution chains, the FCA said.
A review found firms unable to name the person responsible for applying consumer duty rules, with some boards not engaged enough given the rules require a significant change in culture, the FCA said.