The cost of living crisis continues to put the squeeze on pockets but luckily Britons will soon have a new tool to help them secure value for money in financial services.
The Consumer Duty, which sets stronger and clearer standards of consumer protection in the industry, comes into force on 31 July.
The regulation is being implemented in two phases with the first phase beginning at the end of this month and applying to new and existing products and services up for sale and renewal.
The second phase comes into force on 31 July 2024 and applies to closed products and services.
Aimee Gethin, chief operating officer at car finance marketplace Zuto, welcomed the new rules:
She said: “Good news for people who take loans or buy anything on credit: regulation is coming into effect to ensure financial services companies put their customers’ best interests at the heart of everything they do. The Consumer Duty will be enforceable from July 31st and means FS firms will have to prove that everything they do is aimed at achieving good outcomes for customers.
“The Financial Conduct Authority (FCA) which will be enforcing this, suggests firms review products or services that may have features that could risk harm for customers with characteristics of vulnerability.
Gethin added: “Vulnerabilities can differ very significantly and can sometimes be hard to identify: it could mean someone who has difficulty understanding the implications of a financial agreement, or someone who has a low credit score and is struggling to secure finance.
“There are many people within the UK who have a lower credit score, especially now with the cost of living crisis, but they still need a car: they might rely on it to get to work, or transport family members, so, for them, it is often one of their most important purchases.
“There are some easy ways to improve your credit score and also some financial packages that work for customers who are in this position. Your financial service provider should support you and give you the opportunity to access a package that works for you, and, with the Consumer Duty coming in, you can expect it.”
