Are you doing your (Consumer) duty? An opportunity to check you have all bases covered

21 September 2023

Consumer DutyCustomerMeeting of MindsMortgagemortgageoutcomessenior managers

Expert: Mike Harrison, Practice Lead, Insurance and Lending, Bovill Facilitator: Mark Spiers, Partner, Bovill


  1. Most firms are looking beyond the Consumer Duty project to embedding it and then moving to consider the closed product sets
  2. The challenge is to show change and keep the Duty at the front of mind across the firm
  3. Senior managers need to assure themselves about how the outcomes are achieved at the more granular level
  4. Senior managers should seek to carry out assurance across all of the three lines of defense
  5. Outcomes, measuring and consistency are all key

Discussion points:

To ensure embedding, firms should ensure that the Duty is rolled out down to all COCON / ICOBs staff.

How the quality assurance framework has changed - firms should be having monthly meetings with the Consumer Duty champion and relevant senior managers to discuss.

To help ensure fair outcomes, firms should be spotting gaps and areas of inconsistency, for instance on discounting.

Elevation used at the end of completion to test outcomes. 

Suitability letters have been simplified and are now more user friendly for the broker and customer.

One firm is using a number of different ways of engaging with customers, for instance videos and dynamic highlighting of wording to engage the customer with important parts of the service or risk warnings. 

Fair value is challenging and firms should look both inside and outside the mortgage sector for guidance / inspiration as well as other value areas.

Extra services offered by some brokers to customers, almost a concierge service, can be a reason to charge more as an extra service, but hard to prove and demonstrate outside the individual cases.

Protection services around the mortgage can also be a differentiator.

Firms need to consider consistency of approach to give fair outcomes, also on looking to help customers compare services from different providers. Customers should be able to compare services between providers for the market to operate effectively.

Sourcing systems are not as flexible as first thought – for example lender panel can be managed, but at the product level it is harder to achieve.

The quality of other service providers needs to be considered, for instance solicitors not providing effective outcomes for customers. 

Duty seems to be focussing the industry on regulating itself up and down the value chain – achieving the enforced self-regulation stance of the FCA outcomes focussed regulatory stance.

It is anticipated that the FCA will intervene using the Duty combined with SM&CR, with focus on specific actions of the specific managers in their span of control.

Vulnerable customers are now a widening definition. The Duty has increased focus on types of vulnerability, for instance, first time buyers and vulnerability on affordability and how those need to be considered.

Key takeaways:

  • The recent FCA publications on Later Life Mortgages gives a good view of what the FCA wants firms to think about.
  • Firms need to consider different types of vulnerable customers
  • Firms should be looking for inconsistency of approach and where that might be affecting fair outcomes
  • When it comes to the FCA’s focus it is all about whether you have achieved your plan and done anything differently