Over the last few months, we have been reminding members that we are now well into the supervision phase of our relationship with the Financial Conduct Authority.

A key question that supervisors may well ask about is whether lenders are Treating Customers Fairly. A commitment to TCF was a core part of your application.

Are you able to prove it?

However, the key test is having the evidence to back this up.

Whilst a low number of complaints is a good sign, this information alone would not be enough to satisfy the FCA if they were seeking evidence.

Principle 6 of the FCA Handbook states that ‘A firm must pay due regard to the interests of its customers and treat them fairly’, but other principles also apply to this area of business behaviour.

There are six consumer outcomes that firms should strive to achieve to ensure fair treatment of customers:

  • Outcome 1: Consumers can be confident they are dealing with firms where the fair treatment of customers is central to the corporate culture.
  • Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
  • Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
  • Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
  • Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
  • Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

In order to comply firms should be doing a number of things to ensure that they can show that they are meeting the principle requirements.

These include documenting how they treat customers fairly and deliver the six outcomes. Proving how they have adapted a compliance culture and how they effectively use Management Information Monitoring, and audit to make sure the outcomes are met and improve where required.

If you are unsure if you are doing enough to satisfy the FCA, why not come along to our Treating Customers Fairly Training Session which is running in partnership with Walker Morris LLP on the 26th January 2016?

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