On 5 May 2022, the FCA published a speech by Sheldon Mills (Executive Director, Consumers and Competition, FCA) entitled ‘Supporting consumers in challenging times’. The speech was delivered at the Building Societies Annual Conference 2022.

Highlights in the speech include:

• An important part of the FCA’s three year strategy is raising standards in firms, and central to this will be the new Consumer Duty.
• Building societies are encouraged to put themselves in their members’ shoes and ask:  would I be happy to be treated in the way my firm treats its members? Would I recommend my firm’s products and services to my friends and family? Would it be easy for the typical consumer to understand whether my firm’s products and services suit their needs?
• The extension of the FCA’s Product Design and Fair Value rules will be particularly relevant for building societies and is a key change. They will ensure products and services are fit for purpose and targeted at the consumers whose needs they are designed to meet, and represent fair value to those consumers.
• In relation to the rising cost of living the FCA expects lenders to:
  • support members struggling with personal debt or showing signs of financial difficulty during this period, helping them obtain the advice they need and avoid falling victim to scams or illegal money lending;
  • consider whether there is anything they can do to encourage borrowers to think about switching to a less costly option where that is available. The regulators also expects them to consider what they can do to help consumers whose fixed rates products or deals are expiring and are expected to experience a sharp hike in prices;
  • effectively engage and communicate with consumers, ensuring that borrowers are aware of where they can get help and also of the risks of taking on different types of debt or credit. The FCA’s Tailored Support Guidance, published last year due to the coronavirus pandemic, remains the standard for firms when dealing with borrowers in financial difficulty; and
  • train staff so they are able to identify and work with borrowers with vulnerable characteristics and ensure good outcomes for members by tailoring forbearance to individual circumstances.
• The FCA previously outlined its concerns with how lifetime mortgages were sold. It wants to see improvements in this area and lenders are encouraged to consider if their firm could do more to support consumers through the sales journey.
• Building societies and credit unions should consider the FCA’s ESG strategy in the context of designing and distributing products like green mortgages.