The Financial Conduct Authority (FCA) has assessed nine firms regarding their savings products amid concerns about unfair savings deals for consumers.
The Consumer Duty, introduced in July, mandates that firms must ensure their products and services provide fair value to customers. The 14-point action plan established in July aims to guarantee that consumers have access to a competitive savings market.
The FCA will analyze the data provided by banks and building societies and plans to issue an update in the autumn outlining any necessary actions if concerns are identified. Since the introduction of the action plan, the FCA has noted an increase in the availability of higher interest rates in both limited-term and easy-access accounts.
Andrew Gething, managing director of MorganAsh, remarked, “For those still questioning the new regulation, the FCA’s actions today serve as a crucial reminder that Consumer Duty is now active, and firms are required to comply or risk investigation. As the base rate continues to rise, attention remains focused on the savings rates offered by banks and lenders.”
Gething further emphasized that ensuring fair value is essential for achieving positive outcomes for consumers. This requirement extends beyond merely providing fair savings deals; it also involves supporting customers’ financial resilience by informing them of available higher rates. The FCA has pointed out that the response from firms has been slow, indicating the need for regulatory intervention. Effective communication and quality data are fundamental in all aspects of the Consumer Duty.
Furthermore, the FCA has pledged to take action against banks that fail to meet customer needs during the implementation of the Consumer Duty, particularly in light of the fact that 7.4 million people were unable to contact their providers in the year leading up to May 2022.