By introducing the new Duty, the FCA anticipates there will be a “major shift” in financial services and it will mean that "consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it."
More particularly, the Duty will include requirements for firms to:
- end excessive charges and fees
- make it as easy to switch or cancel products as it was to take them out in the first place
- provide helpful and accessible customer support
- provide timely and clear information that people can understand about products and services so consumers can make good financial decisions, rather than confining key information in lengthy terms and conditions
- provide products and services that are right for their customers
- focus on the real and diverse needs of their customers, including those in vulnerable circumstances, at every stage and in each interaction
Affected firms have been given a slight reprieve, with the deadline for implementation pushed back by 3 months to 31 July 2023 (stretching to 31 July 2024 for closed products or services).
Further analysis on the potential impact for insurers of affected firms will follow.