WIREDGOV

The Financial Services Authority (FSA) today reported an increase in commitment by senior management to the principle of Treating Customers Fairly (TCF) but warned firms who have failed to engage that they face tough action.

To ensure rapid engagement, the FSA has also announced a new deadline for all firms to have completed their work on TCF and be able to demonstrate that they are consistently treating their customers fairly by end of December 2008.

The current level of progress on TCF was set out in a report published today.  It detailed firms' performance against the FSA's March deadline - by which time they had to be implementing necessary change in a substantial part of their business.  The results show that 93% of major retail firms, 87% of medium sized retail firms, 74% of wholesale firms (where TCF is relevant) and 41% of small firms met the deadline. 

Sarah Wilson, FSA Director with responsibility for TCF, said:

"We are encouraged that senior management in very many firms are showing strong commitment to TCF and are rising to the challenge of a more principles-based approach to regulation.  The big prize here is achieving improved outcomes for consumers and this is why we have set a further deadline today.  Meeting that deadline will require sustained focus from senior management.

"Following the report we will intensify our supervisory focus on any firm that has failed to sufficiently engage with TCF and include the use of enforcement where necessary.  Most particularly, in addition to all that is already available to them, we will increase our efforts to assist small firms.  Given their size and structure these firms can make rapid progress if they engage."

To help small firms, the FSA will expand the range of TCF online tools and begin the rollout of regional workshops.  In future small firms can expect even more focus on TCF in their dealings with the FSA.

The FSA is devoting more resource to ensuring the new deadline is met and is currently developing a framework to use when testing firms which will identify potential TCF risk areas.  Supervisors will also include in their regular work a greater amount of detailed testing at the front line.  More details will be published in July.

NOTES FOR EDITORS

1.      "Treating Customers Fairly Initiative: Progress Report' can be found on the FSA website. 

2.      To meet the criteria of implementing TCF in a substantial part of their business, firms needed to show they had allocated appropriate resources and responsibilities, developed plans and processes, and created capability to deliver TCF.  Further details on the stages of TCF can be found in the paper Treating Customers Fairly – towards a fair outcome for consumers. 

3.      The figures in the report show an improvement from a self-assessment by firms on implementation of TCF in July 2006 which reported 80% of major retail firms and 50% of medium sized firms believed they were at least implementing TCF.

4.      To ensure firms are progressing towards consumer outcomes and the December 2008 deadline, the FSA has also set an interim deadline of end of March 2008 for firms to have appropriate management information or measure in place to test whether they are treating their customers fairly.

5.      Consumer outcomes:

Firms should be focused on delivering the six TCF consumer outcomes:
i. Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture

ii.     Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly

iii.Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale

iv.Where consumers receive advice, the advice is suitable and takes account of their circumstances

v.      Consumers are provided with products that perform as firms have led them to expect, and the associated service is both of an acceptable standard and also as they have been led to expect

vi. Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint

6.      Tools available to help small retail firms make progress on TCF

We offer materials on principles-based regulation and TCF on our small firms website

·       Our small firms website is already a popular resource with over 50,000 visits per month on average.

·       We have updated the existing information on the TCF section of the website to include key findings from the TCF telephone surveys and sector specific examples of good and poor practice.

·       The site also includes a TCF self assessment tool which many firms have told us that they have found helpful.

·       Later this year, we will launch sector specific self assessment tools to help firms move towards TCF becoming business as usual. This work will also cover management behaviours which drive the culture of a small firm.

We also offer opportunities for firms to engage directly with members of the FSA on TCF.

·       The Firms Contact Centre handles day-to-day queries on general regulatory issues, including TCF.

·       In the last year over 2,500 firms have attended either our free roadshows or taken the opportunity to have a face-to-face meeting with one of our supervisors at a ‘surgery’. A further 1,800 have attended industry training courses for small firms.

·       This month we are rolling out affordable new regional TCF workshops for small firms which will focus on the TCF survey findings and how firms can continue to make progress with their TCF work. These will be available to meet demand and firms can book their place using our new online booking system. 

·       TCF will continue to be a key focus at our free roadshows where firms have the opportunity to hear directly from us and ask questions.

7.      The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.

8.      The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.

ENQUIRIES

Press:          Andrea Kinnear/Vanessa Wood     020 7066 3232

Outside office hours                    07795 351 956

 Public:         FSA Consumer Helpline   0845 606 1234 (call rates may vary)

 Website:        www.fsa.gov.uk