Regulatory Investigations Update - October 2014

The summer and early autumn has been a busy time for the FCA’s enforcement team. FCA Director of Enforcement, Tracey McDermott, used a speech in June to emphasise once again the importance the regulator now places on embedding good consumer outcomes into firms’ business models. The priority given to consumers is borne out by three decisions (on which we report below), which cover the treatment of customers in mortgage arrears, the suitability of mortgage advice and insurance sales. In each the FCA demonstrates the high expectations it has of firms in this area. Firms are now expected to adopt a far more tailored approach to the treatment of their customers, taking steps to identify what might be in their best financial interests and ensuring that these, not the interests of the firm, remain paramount. This will involve a considerable shift in organisational thinking. The fines levied for consumer failings in the last quarter alone, however, indicate that a failure to engage with this issue could prove extremely costly.

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