We are excited to share a new briefing which helps financial service firms understand their new responsibilities set out by the Consumer Duty and respond to customers experiencing economic abuse.
‘How the Consumer Duty can transform responses to economic abuse’ has been produced in partnership with law firm Simmons & Simmons and funded by abrdn Financial Fairness Trust and Joseph Rowntree Charitable Trust. It is freely accessible and provides expert advice for firms.
The Consumer Duty, issued by the Financial Conduct Authority through the Financial Service’s Act 2021 marks a significant shift in the expectations on firms when responding to retail customers. It sets higher standards of consumer protection across financial services, and requires firms to put their consumers’ needs first, with a particular emphasis on customers who may be at a greater risk of harm. This provides financial services firms with a unique opportunity to transform their response to economic abuse.
Firms have until July 2023 to implement it for all new and existing products that are open for sale. The Duty is regulation for Financial Services – it introduces a new consumer principle which requires firms to ‘act to deliver good outcomes for retail customers’.
Lauren Garrett, Financial Services Manager at Surviving Economic Abuse (SEA) said,
“We’re so excited to launch this briefing and grateful to Simmons & Simmons for lending their expertise to it. Financial firms have always been uniquely placed to support victim-survivors of economic abuse and the Consumer Duty introduces a new standard to strive for.
“We have created this practical and comprehensive guide to help firms not only improve responses for their customers experiencing abuse, but also to understand how they might prevent it happening in the first place by making changes to product design and services. For example, considering how joint products, such as mortgages and insurance , can act as a barrier to a victim-survivor leaving an abuser, facilitate further abuse post-separation and prevent the victim-survivor from gaining economic safety.
We are keen to ensure that firms are not left to navigate the Consumer Duty by themselves and are able to use this opportunity to transform their responses to economic abuse. SEA is proud to work alongside firms who are already striving to improve outcomes for all victim-survivors, and we hope this briefing will help firms further protect their customers and make it harder for perpetrators to exploit their products.”
Victim-survivor of economic abuse, “My ex hasn’t made a single payment towards the mortgage in 5 years. And it has now increased by £700. I can’t afford it. I’ve spoken to my bank and they’ve said they can’t help me without his consent but he isn’t responding to them. I’m too scared to contact him. I’ve been left trying to pay for everything to keep the roof over my son’s head. And he can just ignore it all”.
Karen Barker, Head of Policy and Research at the abrdn Financial Fairness Trust said, “Victim-survivors of economic abuse are some of the most financially vulnerable people in society. Financial services have an invaluable role to play in protecting victim-survivors, and this resource from SEA can support them to do so.”
Neil Mitchell, Head of Customer Risk at TSB said, “We welcome the insight it provides and think it will prove useful for companies, who are focused on helping victim-survivors of domestic abuse, as they shape their approach to the New Consumer Duty.”
Natalie Ledward, Head of Vulnerability, Access & Inclusion, Monzo Bank said, “At Monzo, ensuring we are providing the best possible support to our customers, including those who are most vulnerable, is at the heart of everything we do. We welcome a more proactive approach which will encourage all firms to actively identify potential points of harm in the customer journey and do something about them – hopefully leading to better outcomes for everyone. At Monzo we’re already doing this when supporting victim survivors of abuse by training staff across the business on how to understand and recognise economic abuse as well as piloting the economic abuse evidence form.”
Plenitude Consulting said, “Plenitude Consulting welcomes the new Consumer Duty, as it provides a great opportunity for firms to become more proactive in mitigating and minimising economic abuse and other financial crimes from occurring towards victim-survivors. When all firms transform their response, they open up new opportunities for prevention and pave the way for better understanding and outcomes.”
Examples from the briefing on how firms can help victim-survivors of economic abuse
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