The Financial Conduct Authority (FCA) has launched proposals that aim to better protect consumers when using financial services including property investment clubs.
Its consultation sets out ways to tackle the causes of harmful practices, with suggested rules to raise industry standards by putting the emphasis on firms to get products and services right in the first place.
Under a new Consumer Duty, firms will have to provide information they can understand, offer products and services that are fit for purpose and provide helpful customer service.
However, while the FCA’s remit covers property investment clubs – either collective investment schemes or alternative investment funds – which allow people to pool resources and invest in property often linked to developers, it does not cover unregulated property training companies and education programmes.
The FCA’s Consumer Duty proposals hope to bring about a fairer, more consumer‑focused and level playing field in which firms consistently put their customers’ interests at the centre of their businesses.
The FCA has also published draft guidance to help them prepare before it is introduced.
Sheldon Mills (pictured), executive director of consumers and competition at the FCA, says that too often, consumers are not given the information they need to make good decisions and are sold products or services that don’t offer the benefits they might expect.
“We want to change that. We’ve been working to set a higher standard for firms, to put more of the onus on them to act in their customers’ interests and get their products and services right,” adds Mills, who says it will hold senior managers accountable if they don’t.
“The duty will also help create an environment for healthy competition between firms, encouraging them to be innovative in developing products and services that meet consumers’ needs.”
The consultation is open until 15th February and final rules are expected to be announced by July.
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