The FCA introduced the Enforcement Watch newsletters in light of a suggestion made in response to its consultation on publicising enforcement investigations (CP24/2). The newsletters provide detail on the topics and trends in the FCA’s investigations and enforcement work, aiming to help firms identify areas of potential vulnerability in their business. The publication of this second edition follows the FCA’s first newsletter in January (see our briefing on Enforcement Watch 1 here). Enforcement Watch 1 covered a range of issues and sectors so it is notable that the FCA has now chosen to concentrate their attention on the Duty only.
The FCA’s expectations in relation to the Duty
Principle 12 reflects the FCA’s expectation that firms consider customer outcomes and put customers’ interests at the heart of their activities. The FCA is clear that firms should: (i) continually challenge themselves to make sure their actions are compatible with their customers’ interests and financial objectives; and (ii) work to identify and prevent harm from occurring, and provide evidence of good consumer outcomes.
From a supervisory perspective, the FCA supports firms in this area by publishing examples of good practice and areas for improvement, often following multi-firm work. In more assertive supervision, since it was introduced, the FCA has commissioned around 30 skilled person reviews which reference the Duty.
Interventions concerning the Duty
Last year the FCA intervened 382 times. It can use formal powers such as imposing requirements on firms, but it does not always need to, to achieve the right outcome. Once it has intervened, the FCA will continue its supervisory engagement with a firm, including ensuring that any deficiencies in the firm are remedied and that the restrictions put in place are complied with.
In terms of publicity regarding interventions, the FCA notes that it usually publishes VREQs on the Financial Services Register for reasons of transparency and consumer protection, though it may remove the restrictions once the issues are resolved and it is not possible to search the Register to identify which firms have been the subject of requirements. The FCA almost always publicises OIREQs through issuing Supervisory Notices, unless there is a strong reason not to, such as where a firm exercises its right to challenge an OIREQ in the Upper Tribunal and makes a privacy application.
Enforcement in relation to the Duty
The FCA opens investigations where its Supervision team has detected serious misconduct and it considers that an enforcement investigation is necessary, proportionate, and likely to create impactful deterrence. In assessing whether to open an enforcement investigation, the FCA considers factors including its regulatory priorities, the seriousness of the misconduct, the harm (or potential harm) it has caused, and whether other regulatory responses might be more effective.
The FCA is currently investigating 11 matters involving potential Duty breaches, including investigations in the insurance, pensions, wealth management, consumer investments, peer-to-peer lending and claims management sectors and the newsletter provides some further detail on some of these open cases. With regards to the insurance sector, in September 2025 the consumer advocacy group Which? submitted a super-complaint to the FCA regarding home and travel insurance and in the FCA’s response it mentioned investigations in this area. In our briefing on the response we set out our thoughts on considerations for firms in light of the FCA’s response to the super-complaint, including what this signifies in terms of the FCA’s approach to the Duty.
In several cases, the FCA is investigating whether consumers received fair value for a product or service in line with PRIN 2A and/or its PROD Rules which work alongside the Duty. The FCA explains that fair value is about more than just price – for example, there is unlikely to be fair value provided where a product or service doesn’t meet any of the customer’s needs, causes foreseeable harm, or frustrates their objectives, whatever the price. In some investigations, the FCA is looking at whether firms have properly assessed whether the price consumers paid was reasonable compared to the overall benefits.
The FCA emphasises however that it is not only interested in price and value. The different parts of the Duty often overlap, and a product or service that does not meet its customers’ needs may fall short of the Duty in several ways. For example, the FCA may look at: whether the features of the product or service were made clear to customers before, during and after sale to help them make an informed choice about purchasing or continuing with the product or service; and/ or what support was given to customers when things went wrong.
For further updates in relation to these areas please see our Interventions and Investigations Hub and our Consumer Duty Hub.