5 The Consumer Duty The Consumer Duty aims to set higher and clearer standards of consumer protection across financial services. It requires firms to put their customers first and to evidence how they are doing this. The Consumer Duty comprises the following regulatory components: • Principle 12 for firms – A firm must act to deliver good outcomes for retail customers • Three cross cutting rules. Firms must: – Act in good faith toward retail customers – Avoid foreseeable harm to retail customers – Enable and support retail customers to pursue their financial objectives • Four outcomes: – Products and services To ensure all products are services are fit for purpose, designed to meet the needs, characteristics and objectives of a target group of consumers and distributed appropriately. – Price and value To ensure that all consumers receive fair value and that there is a reasonable relationship between the price paid for a product/service and the overall benefit a consumer receives from it. – Consumer understanding To ensure firms’ communications support and enable consumers to make informed decisions about financial products/services. – Consumer support To ensure firms provide a level of support that meets consumers’ needs throughout their relationship with the firm. The Consumer Duty applies to firms manufacturing products and services (manufacturers) and firms distributing products and services (distributors).
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