The terms a UK retail conduct team actually uses, defined in plain language by practitioners. For the full walk-through, see the Consumer Duty practitioner's guide.
The FCA's package of rules and guidance, set out in the Principles for Businesses at PRIN 2A, that requires firms to act to deliver good outcomes for retail customers. It comprises the Consumer Principle, three cross-cutting rules, and four outcomes.
The overarching standard at the heart of the Consumer Duty: a firm must act to deliver good outcomes for retail customers. It raises the bar from treating customers fairly to delivering good results.
The section of the FCA Handbook's Principles for Businesses that carries the detailed Consumer Duty rules and guidance, including the cross-cutting rules and the four outcomes. A firm works from PRIN 2A when it needs the rule on a given point.
The three rules that describe how a firm meets the Consumer Principle across all its dealings with retail customers: act in good faith, avoid foreseeable harm, and enable and support customers to pursue their financial objectives.
The first cross-cutting rule. Deal honestly, fairly, and openly with retail customers, consistent with their reasonable expectations, and do not exploit a customer's lack of knowledge or a behavioural bias.
The second cross-cutting rule. Take reasonable steps to avoid causing harm that a firm could reasonably anticipate, through product design, sales practices, or its own conduct. Harm does not have to be intended to count.
The third cross-cutting rule. Act to enable and support retail customers to pursue their financial objectives, rather than putting unreasonable barriers in the way of decisions in their interest.
The four concrete areas where the Consumer Duty is tested: products and services, price and value, consumer understanding, and consumer support. Each names a result the customer should experience.
The outcome requiring that products and services are designed to meet the needs, characteristics, and objectives of an identified target market, and are distributed to that market rather than to customers they do not suit.
The outcome requiring a reasonable relationship between the price a customer pays and the benefit they receive. It is a value assessment, not a price cap. The regulator does not set prices.
The outcome requiring that communications equip customers to make decisions that are effective, timely, and properly informed. The test is whether the customer understood, not whether the disclosure was technically accurate.
The outcome requiring that support meets customer needs so they can use their products and realise the benefits without facing unreasonable barriers, including when they want to switch, complain, or leave.
The individuals and smaller clients the Consumer Duty is built to protect. The Duty governs a firm's dealings with retail customers and does not generally extend to wholesale activity.
The set of firms involved in creating, providing, arranging, and selling a product or service to retail customers. The Duty reaches every firm in the chain whose actions affect the customer outcome.
A firm that creates, develops, designs, or operates a product or service for retail customers. It carries the product-design and value obligations and defines the target market the product is built for.
A firm that offers, sells, recommends, advises on, arranges, or otherwise distributes a product or service to retail customers, and is responsible for reaching the right customers and feeding information back up the chain.
The standard at the heart of the price and value outcome: the relationship between the total price a customer pays and the total benefit they receive is reasonable for the target market. The firm assesses it and records the conclusion.
Harm to retail customers that a firm could reasonably anticipate, arising from product design, distribution, sales practices, or conduct. The Duty requires firms to take reasonable steps to avoid it.
The group of retail customers a product or service is designed for, defined by their needs, characteristics, and objectives. Defining the target market and distributing to it is central to the products and services outcome.
A customer who, because of health, a life event, low resilience, or limited capability, is at greater risk of harm. The Duty expects firms to account for customers in vulnerable circumstances across every outcome, not in a separate annex.
A board-level individual, typically a non-executive director, who keeps the Consumer Duty on the board's agenda and challenges whether the firm is delivering good outcomes rather than just activity.
The firm's ongoing collection and review of data on the outcomes its retail customers actually experience, used to detect where good outcomes are not being delivered and to drive action.
The assessment of whether the firm is delivering good outcomes consistent with the Duty, which the board or equivalent governing body reviews and approves at least annually, identifying gaps and the action to close them.
The results retail customers should experience under the Consumer Duty, judged across the four outcomes. The Duty measures a firm against the outcomes customers actually receive, not the fairness of its processes alone.
The Financial Conduct Authority, the UK regulator of conduct in financial services. It makes and enforces the Consumer Duty through its Handbook.
The body of rules and guidance issued by the FCA. The Consumer Duty sits in the Principles for Businesses section, with the detailed rules at PRIN 2A. It is the source of record for uncertain points.
Compliance Command Center turns these concepts into a defensible, board-ready program, run by practitioners and backed by software. It maps your products to the four outcomes and assembles the annual board report from evidence.
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