Consumer Duty and the cost-of-living, from embedding to enforcement - a key focus of the FCA Business Plan for 2023/24

The FCA has published its latest Business Plan for 2023/24, setting out the roadmap for the next 12 months towards delivering the commitments outlined in its strategic plan for 2022-25. Our briefing note navigates the highlights, but as the FCA continues its drive to prioritise consumer needs, strengthen enforcement and direct resources effectively into critical commitments, it comes as no surprise that the Consumer Duty is a recurring presence. 

The ongoing cost of living crisis and squeeze on household incomes set into sharp relief the FCA's shift in expectations of firms dealing with consumers and the importance the FCA places on consumer protection in a turbulent economic market. The connection is clear - the FCA has focused much of its Business Plan on outcomes supporting consumers in an environment of significant financial pressure and has made clear that the Consumer Duty is of particular importance in achieving those outcomes. After all, as incomes are further squeezed and costs further rise, the vital importance of good customer outcomes is all too clear. 

The priority the FCA is placing on the Consumer Duty is evidenced by its dedication of significant resourcing and £5.3million of additional funds to ensure firms are not just embeding the Duty at the heart of their business, but upholding it accordingly. The additional funding will also be directed to the establishment of an Interventions team within Enforcement, primed from day one of the Duty coming into force and intended to enable rapid action where immediate consumer harm is detected, while further investigative resource will prioritise swifter investigation of more significant misconduct. 

As the FCA proceeds with its strategic plan, crystallising key aims in the implementation of the Consumer Duty, it is therefore clear that the focus is not just on ensuring that the Duty is effectively embedded, but that it is also effectively enforced - authorised firms causing harm to consumers under the new higher standards of the Duty will be directly in the regulator's sights.