The Bishop of St Albans received the following written answers on 9th November 2022:
The Lord Bishop of St Albans asked His Majesty’s Government:
- whether they consider that the new Consumer Duty set out by the Financial Conduct Authority in their policy statement PS22, published on 9 July, is the same as a general duty of care; and if not, what the differences are.
- what assessment they have made of whether the new Consumer Duty set out by the Financial Conduct Authority in their policy statement PS22, published on 9 July, will be effective.
- what plans they have, if any, to introduce a statutory duty of care for consumers.
Baroness Penn (Con): The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) prohibit traders from engaging in unfair commercial practices towards consumers. The CPRs already prohibit practices that contravene the requirements of professional diligence, which is defined as the standard of special skill and care that a trader may reasonably be expected to exercise towards consumers, commensurate with either honest market practice or the general principle of good faith.
The Financial Services Act 2021 required the Financial Conduct Authority (FCA) to consult on whether it should make rules giving regulated financial services providers a duty of care over their customers. This was in response to concerns from Parliamentarians and others, who wanted to reduce levels of consumer harm in financial services.
The FCA published a final Policy Statement on its new Consumer Duty on 27 July 2022, following two consultations in May and December 2021.
The FCA has set out its views on how the Consumer Duty satisfies the requirement for it to consult on the introduction of a duty of care for financial services firms, and why the Consumer Duty amounts to a duty of care.
The FCA, as an operationally independent regulator, is responsible for implementing and enforcing its Consumer Duty rules. It would not be appropriate for the government to comment on the specific rules introduced by the FCA.