YOUR INDUSTRY

Your Industry

Current Issues

Treating Customers Fairly (TCF)

NEW: AMI TCF area, please click here to view

The FSA's TCF agenda has been at the forefront of the move to a more principles-based regulatory regime. FSA's Principle 6 is: 'A firm must pay due regard to the interests of its customers and treat them fairly'.

For FSA, TCF is not about firms being nice to their customers, it's about being fair. FSA has a four stage approach for firms dealing with TCF within the business and expect senior management to take ownership in delivering TCF. The four stages of dealing with TCF are:

Awareness
Strategy and planning
Implementation
Embedding.

TCF deadline

In its July 2006 papers on TCF, 'Towards fair outcomes for consumers', FSA issued a deadline of March 2007 for all firms to have implemented TCF in a significant part of their business. The paper analysed firms' progress with TCF and the picture was mixed. FSA said the majority of firms were making good progress, while others were 'lagging behind'. It also focused on senior management TCF buy-in and said that while the senior management of most firms are showing 'a commitment to reviewing their practices and introducing changes where necessary', this was not always filtering through to the customer-facing front-line staff. A readers' guide on the paper for small firms is available here.

The paper also includes a number of cluster reports for mortgage and GI firms giving examples of good and bad practice FSA has seen in its TCF work.

Considerations for mortgage firms

Considerations for GI firms.

There is also a paper specifically on TCF considerations for management information. View here.

AMI Factsheets

To help AMI members with their TCF responsibilities and the March deadline, two factsheets have been published:

Factsheet 22 - 'A Guide to Treating Customers Fairly'

Factsheet 30 - 'AMI Guide to Developing TCF'

Factsheet 30 in particular is aimed at smaller firms looking to conduct a review of TCF within their business. It will help clarify what you need to do to deliver TCF and move you on your way to the 'Implementation' deadline of March 2007. It also includes a gap analysis tool to give you an idea of what areas you need to work on. Members should ensure they document this analysis, review and any changes made as a result of this work. FSA will be looking for proof of this work in its review of firm's TCF commitment.

FSA also have a one-page self-assessment toolkit for small firms to determine if they are doing all they can to treat their customers fairly. View here.

Consumer outcomes

FSA have outlined six consumer outcomes it would like to see all firms moving towards. They are:

Consumers can be confident that they are dealing with firms where the fair treatment of consumers is central to the corporate culture;
Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly;
Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale;
Where consumers receive advice, the advice is suitable and takes account of these circumstances;
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; and
Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

FSA is currently developing the methodology on how it will measure progress by firms towards these outcomes.

Provider/Distributor responsibilities

AMI is represented on the FSA's TCF Consultative Forum and feeds into the regulator's work and TCF output. We have pressed hard for FSA clarification on the responsibilities for providers (for example, mortgage lenders) and distributors (for example, mortgage intermediaries). We believe that a more transparent, closer relationship between lenders and intermediaries will deliver benefits for both and, importantly, consumers. We also feel that historically intermediaries have been held accountable for areas of the product life cycle which were not their responsibility.

The paper has been designed to help both providers and distributors understand their respective responsibilities. AMI will be responding on members' behalf to the Discussion Paper which is available here.

AMI will continue to offer members advice and information on how firms can embed TCF in their business practices.

FSA information

Look out for further updates and details in our monthly newsletters and factsheets.

FSA has a dedicated web page on TCF. It includes details of latest publications and key messages coming out of the regulator on TCF. View here.

FSA has a list of frequently asked questions on TCF. View here.

FSA have a TCF library on its website which includes all reports and information published in relation to the TCF initiative. View here.

Sarah Wilson, director responsible for TCF at FSA, gave a speech to the TCF in Retail Finance Conference in September 2006. It focused on delivering improved outcomes for consumers through TCF. View here.

In July 2005, FSA published a paper on what it believes TCF means for small firms. View here.

FSA also offer TCF training for firms. Further details of courses and costs are available. View here.

FSA held a TCF conference in November 2006. Delegates were invited to participate in a series of polls. View the results.