Treating customers fairly (TCF) is central to the delivery of our retail regulatory agenda, which aims to ensure an efficient and effective market and thereby help consumers achieve a fair deal.
The current environment is challenging for firms as they look to stabilise and rebuild their capital base. This, combined with a low interest rate environment where returns on investments are not at the levels of previous years, generates risks for consumers.
Firms will be looking to move into a phase of growing revenue by attracting profitable customers and reducing unprofitable customers, delivering revenues that increase capital and profitability at the same time as consumers are reducing levels of household debt and looking to save and invest their money with good returns.
TCF, with its focus on consumer outcomes, is central to our work in ensuring a fair deal for consumers. It underpins the delivery of our statutory consumer protection objective and times of market turbulence are when consumers need protection the most. We recognise the difficult economic and financial conditions, but emphasise that firms must not divert attention away from focus on risks to the fair treatment of customers.
Firms must be able to demonstrate that they are consistently delivering fair outcomes to consumers and that senior management are taking responsibility for ensuring that the firm and staff at all levels deliver the consumer outcomes relevant to their business through establishing an appropriate culture. We expect firms to:
- demonstrate that senior management have instilled a culture within the firm whereby they understand what the fair treatment of customers means; where they expect their staff to achieve this at all times; and where firms promptly identify (a relatively small number of) errors, put things right and learn from them;
- be appropriately and accurately measuring performance against all customer fairness issues materially relevant to their business, and be acting on the results;
- be demonstrating through those measures that they are delivering fair outcomes; and
- have no serious failings – whether seen through management information (MI) or known to us directly – including in areas of particular regulatory interest we have previously publicised.
Please see our latest update on the TCF initiative in November 2008, which reminds firms what we require of them and explains how we will assess them:
Also, there is a detailed discussion of our approach in Nausicaa Delfas’s March 2009 speech.
The six TCF outcomes
Through TCF, we aim to deliver improved outcomes for retail consumers. Our six consumer outcomes explain what we want TCF to achieve for consumers, as outlined in our July 2006 publication Treating customers fairly – towards fair outcomes for consumers.
Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.
Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.
Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.
Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.
Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.
Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.
Back to top
