What is the new Consumer Duty regime and how will it work?

Like many in our industry, the back end of 2022 saw a focus towards the implementation of FCA’s Consumer Duty regime.

For us to best meet the significant changes introduced by the new regime, for both our clients and their customers, we have been proactive in preparing a plan, had it signed off by the board and started the implementation last year.

We designed and disseminated a Consumer Duty information pack explaining to our clients the strategy we’ve taken, including the plan and implementation process.

Click here to speak to a member of our team about the information pack

Our first port of call was to explain, in simple language, the four key components relevant to those from our industry.

(See below, taken directly from our client Consumer Duty information pack)

The Consumer Duty

The Consumer Duty regime imposes rules that in-scope firms are required to uphold to deliver good outcomes.

Namely, to act in good faith towards customers, avoid foreseeable harm to customers, and help consumers achieve their financial objectives.

The Consumer Duty rules refer to four distinct ‘good outcomes’ which in-scope firms should seek to achieve, these are as follows:

  1. Price and Value: Assess whether the price of a product or service provides for a fair value to customers.
  2. Products and Services: All products and services must be fit-for-purpose (i.e. designed to meet consumers’ needs and targeted to them).
  3. Consumer Understanding: Communications must support consumers and enable them to make informed decisions about financial products and services.
  4. Consumer Support: Firms must provide a level of support that meets consumers’ needs throughout the lifecycle of the customer relationship.

Happily, the new Consumer Duty neatly aligns with our existing customer purpose at coeo; with the core principles of making sure that customers have the knowledge and the ability to make informed decisions about their financial objectives.

We operate in sectors where customer conversion risks are high, and when it comes to the retail consumer, recognising and expecting a customer may have little or no experience with a collections team is extremely important.

The Consumer Duty helps by offering us an absolute definition of the retail consumer, allowing us to review our communications to make sure the correct outcomes are achieved.

It can be overwhelming for customers when contacted by a collections agent for the first time. They may be unaware of the process, who’s contacting them, how we came about their contact details etc. So, approaching all customers with a ‘helping people’ ethos and applying the four concepts described in the Consumer Duty regime above is crucial to removing barriers and working towards outcomes that benefit everyone.

Helping people ‘get their debt sorted’ has been one of the cornerstone values directing how we operate our business, and this runs through everything we do, be it staff training and induction, board meetings, as well as mapping all customer journeys.

We continually undertake internal reviews to make sure we hold true to our customer purpose and ask ourselves questions such as: are our services fit for purpose? Is the web chat an easy touch point in the customer journey? How can we improve it? Does the website do what we anticipated it to do for customers? How can we improve it? and much more…

Where the Consumer Duty has really helped is we now have absolute clarity on what constitutes a ‘good customer outcome’, so at a high level with the detail underneath it, you then know what needs to be provided:

  • Fair pricing for the customer.
  • Products that are fit for purpose and designed to meet the consumer need.
  • Communications and support for customers to help them make informed decisions.
  • Continued support to help them throughout their entire customer lifecycle.

Cross Cutting rules

The Cross Cutting rules make sure that we also have absolute clarity about how firms act in delivering those good customer outcomes.

The Consumer Duty includes three Cross Cutting rules which set out how firms should act to deliver good outcomes for retail customers.

They require firms to:

  1. Act in good faith towards the retail customer.
  2. Avoid causing foreseeable harm to retail customers.
  3. Enable and support retail customers to pursue their financial objectives.


coeo must, as per the Cross Cutting rules, act in good faith and have a robust compliance framework in place to support the firm, proactively avoiding causing foreseeable harm to retail customers.

Practical application example:

Audit templates will be adapted to incorporate both the Cross Cutting rules and outcome rules to ensure we are consistently assessing all processes and procedures against all elements of the duty. The audit plan will allow us to monitor the overarching requirements to ensure we are meeting these rules.

(Taken from coeo client Consumer Duty information pack)

The Cross Cutting rules underpin once again our purpose, that we are here to help retail consumers make informed and affordable choices. Helping people clear the debt should be the objective and should be the role we play in people’s lives.

Combatting risk should be at the heart of our industry. At coeo we have a conduct risk register and conduct risk forum underpinning the majority of what we do, and quite rightly, given the nature of our work. Good customer outcomes are a regular topic when discussing our QA.

The Cross Cutting rules offer us the exact detail to measure what is meant by ‘good customer outcomes’ and how to apply them.

A further benefit has been the opportunity to stress test our risk register, its policies, and the procedures. We’ve been able to design a defence model to ensure we are as robust as we can be.

In our second line of defence, we have an audit schedule and audit templates ready, and the overall approach has helped enhance these tools and not made them obsolete.

Final thoughts

Building in the Consumer Duty concepts makes sure that as an industry we’re forced to look at every aspect through the eyes of a retail consumer.

We understand due to our breadth of clients from various industries, not one process fits all. So, we have evolved our internal systems to ensure our clients’ customers enjoy the correct outcome, not the outcome best suited for a DCA.

As a company we recognise the role that we play in people’s lives. We may not sell end user products but that doesn’t mean when we engage with customers at the end of the customer journey, they won’t have questions. A utilities customer might ask about their bill or usage and as part of the customer journey we believe it’s in our own and our clients’ best interests to make sure we’re able to provide an answer leading to a solution for each individual.

To find out more about the coeo approach to the Consumer Duty, click here to speak to one of our specialists