The Consumer Duty is the FCA's standard for how firms treat retail customers. It is set out in Principle 12 and PRIN 2A of the FCA Handbook, and requires firms to act to deliver good outcomes, evidence that they do, and put right poor outcomes when they find them. It is an ongoing obligation, assessed each year through a board report and continuously through supervision.
| Requirement | Where it sits | What it means in practice |
|---|---|---|
| Consumer Principle | Principle 12 | Act to deliver good outcomes for retail customers |
| Act in good faith | PRIN 2A.2 | Honest, fair and open dealing; no exploiting lack of knowledge |
| Avoid foreseeable harm | PRIN 2A.2 | Anticipate and prevent harm, directly or through the distribution chain |
| Enable and support customers | PRIN 2A.2 | Help customers pursue their financial objectives |
| Products and services | PRIN 2A.3 | Designed for a defined target market and distributed to it |
| Price and value | PRIN 2A.4 | A reasonable relationship between total price and benefits |
| Consumer understanding | PRIN 2A.5 | Communications that equip customers to make decisions |
| Consumer support | PRIN 2A.6 | Support that meets needs, without unreasonable barriers |
| Distribution chain | PRIN 2A.7 | Responsibilities based on each firm's role and influence |
| Governance and board report | PRIN 2A.8 | Annual board assessment of whether good outcomes are delivered |
| Monitoring outcomes | PRIN 2A.9 | Data that shows good, poor and different outcomes, and action on it |
| Individual accountability | COCON Rule 6 | Staff in SM&CR firms act to deliver good outcomes |
The Duty has scope rules. It applies to retail customers as defined for each sector, and it does not cover every customer or activity of every firm. A firm should record its scope assessment before building the rest of its framework. The firm's Consumer Duty compliance support starts from that scope assessment.
| Date | Milestone |
|---|---|
| 27 July 2022 | Final rules published in PS22/9 with guidance in FG22/5 |
| 31 July 2023 | Duty applies to new and existing products open to sale or renewal |
| 31 July 2024 | Duty applies to closed products and services |
| March 2025 | FCA feedback statement FS25/2 on reviewing Duty requirements |
| September 2025 | FCA publishes its Consumer Duty focus areas and requirements review |
| March 2026 | Joint FCA and ICO statement on vulnerability-related data |
| 27 July 2026 | FCA findings on outcomes monitoring across 56 firms |
| 17 September 2026 | FCA findings on payments firms and customers in vulnerable circumstances |
The FCA has not changed the core of the Duty, but it is refining how it applies. In 2025 it withdrew more than 90 Dear CEO and portfolio letters and more than 100 older reports, many of which predated the Duty. Its requirements review update, last updated on 5 October 2026, shows that consultation paper CP26/23 has proposed changes to the distribution chain rules, with a policy statement planned for the first quarter of 2027, and to the Duty's scope for non-UK customers, with a policy statement planned for the fourth quarter of 2026. Until the final rules are published, the existing rules apply.
The FCA's good and poor practice publications are the most practical guide to how it assesses firms. Each sets out what stronger firms do and where others fall short, and supervisors use them as the benchmark.
| Publication | Date | Main lesson |
|---|---|---|
| Price and value outcome update | September 2024 | Assess value by customer group, not only on average |
| Consumer Duty board reports | December 2024 | Reports need evidence, analysis and board challenge |
| Complaints and root cause analysis | December 2024 | Use complaint themes to fix underlying causes |
| Consumer support outcome | March 2025 | Post-sale support and exit should match sign-up |
| International payment pricing transparency | May 2025 | Show exchange rate mark-ups and total cost clearly |
| Digital design in online journeys | July 2025 | Avoid design that steers customers against their interests |
| Consumer understanding | March 2026 | Test communications with real customers |
| Products and services | July 2026 | Compare actual distribution with the target market |
| Outcomes monitoring | July 2026 | Measure outcomes, not activity, and keep an audit trail |
| Payments firms and vulnerable customers | September 2026 | Identify vulnerability consistently and test support |
The Duty applies to firms that manufacture or distribute products and services to retail customers in the UK. That includes banks and building societies, insurers and intermediaries, investment firms and platforms, consumer credit firms, mortgage firms, and payment and e-money firms. It covers activities regulated under FSMA, the Payment Services Regulations 2017 and the Electronic Money Regulations 2011.
The Duty is not retrospective. It does not apply to firm conduct before the implementation dates, but it applies to the ongoing treatment of customers who bought products earlier.
Principle 12 requires firms in scope to act to deliver good outcomes for retail customers. It sets a higher standard than Principles 6 and 7, which it replaces for retail business within scope. The test of reasonableness is objective: what a prudent firm carrying on the same activity would do.
A poor outcome is not automatically a breach. The FCA asks whether the firm acted reasonably to prevent it, whether it identified it, and how it responded. Firms should define good and poor outcomes for each key product and customer journey so that their monitoring has something specific to measure against.
The three cross-cutting rules in PRIN 2A.2 apply across the whole customer relationship.
Firms should act on evidence of foreseeable harm early, before it becomes widespread, and record the decision and the reasoning.
| Outcome | What it requires | Evidence the FCA expects |
|---|---|---|
| Products and services | Designed for an identified target market and distributed appropriately | Target market definitions, product approval records, distribution data, post-launch reviews |
| Price and value | A reasonable relationship between total price and benefits | Fair value assessments by product and customer group, with outcome data |
| Consumer understanding | Communications that support timely, informed decisions | Communication testing results, comprehension metrics, complaint themes |
| Consumer support | Support that meets needs, without unreasonable barriers | Contact times, journey friction data, exit and switching data, vulnerable customer outcomes |
All four outcomes carry the same expectation for vulnerable customers: outcomes as good as those for other customers. The sections below take each outcome in turn.
Target markets should be specific: who the product is for, who it is not for, and the needs and characteristics it is designed to meet. Product approval should test the product against that market, and significant changes should go through the same governance.
After launch, firms should compare actual distribution and outcomes with the intended target market. If customers outside the target market are buying the product, or customers inside it are not getting the expected benefit, the firm should investigate. The FCA's July 2026 good and poor practice publication on the products and services outcome describes how stronger firms do this.
Responsibilities depend on each firm's role and influence over outcomes, not on contractual labels. Manufacturers should give distributors the information they need, and distributors should report back on outcomes, complaints and customers outside the target market. The FCA's December 2025 statement on firms working together to manufacture products, and the CP26/23 proposals on distribution chains, both address how responsibility is shared.
The price and value outcome does not require the lowest price. It requires a reasonable relationship between the total price the customer pays over the life of the product and the benefits they receive. The assessment should cover the product's nature, benefits, quality and limitations, all charges including fees and interest, and the costs of switching or exiting.
Where value is not fair, the firm should act: change the price, improve the benefits, withdraw the product or move customers to a better option.
Communications must be clear, fair and not misleading, but the Duty goes further. Information should be timely, relevant to the decision the customer is making, and suited to the audience, the product's complexity and the channel. One-to-one communications should be tailored to the individual where the firm knows their circumstances.
Firms should test communications before use and monitor how well customers understand them in practice, for example through comprehension testing, call reviews and complaint themes. The FCA's March 2026 good and poor practice publication on consumer understanding gives examples of effective testing.
Financial promotion rules apply independently of the Duty. Promotions should be assessed for their overall impression, not only their individual statements, and outcome data, such as which customers a campaign attracted, should feed back into marketing decisions.
Customers should be able to get help, make changes, complain, switch or leave without unreasonable friction. Post-sale support should be as good as pre-sale support.
In the July 2026 outcomes monitoring findings, one firm cut its average first response time from 22 hours to under 2 minutes and its average resolution time from 4 days to under 3 hours over six months, and used management information to show the change.
Vulnerability can arise from health, life events, low resilience or low capability. Firms should understand the vulnerability present in each target market, identify vulnerable customers through journeys and staff training, provide flexible support, and monitor whether vulnerable customers receive outcomes as good as others.
The FCA's September 2026 findings on payments firms noted that around half of UK adults show at least one characteristic of vulnerability, yet some firms identified very few or no vulnerable customers. Stronger firms recorded vulnerability consistently, routed possibly vulnerable chat users to human agents, and tested their identification processes.
Vulnerability data should be handled proportionately. The joint FCA and ICO statement of March 2026 confirms that data protection law does not prevent firms recording and using vulnerability information to support customers, provided they do so lawfully and transparently.
The FCA's outcomes monitoring findings, published on 27 July 2026 after a survey of 56 firms, set the current benchmark. Stronger firms defined good outcomes for each key product, mapped them to journey stages such as joining, using and leaving, explained why thresholds were set where they were, and tracked actions with named owners and dates.
| Outcome | Example outcome metric |
|---|---|
| Products and services | Share of customers outside the target market; product usage against expected use |
| Price and value | Fees paid per customer by segment; share of customers paying penalty or dormancy fees |
| Consumer understanding | Comprehension test scores; contacts asking what a charge was for |
| Consumer support | Time to resolve; repeat contact rate; time and steps to close an account |
Smaller firms can take a proportionate approach: a focused set of indicators, a simple action log and regular case reviews. Proportionality changes the scale of the evidence, not the need for it.
Payment firms should assess account features, fee structures, foreign exchange mark-ups and service levels against the four outcomes. The FCA's May 2025 findings on international payment pricing focused on clear disclosure of exchange rate costs, and its October 2024 review of 23 payments firms found that just under half had only partially implemented the Duty. Account restrictions for fraud or financial crime reasons also need to be handled with the Duty in mind.
Banks should review current accounts, savings, overdrafts, loans, credit cards and mortgages. Savings rates relative to market rates, overdraft charges and support for customers in financial difficulty have been recurring supervisory themes.
Platforms should make total costs easy to find and calculate, using worked examples, cost calculators and plain-language fee tables. Switching should be straightforward, and exit fees that deter customers from leaving reduce value and should be justified or removed.
Consumer credit firms should focus on affordability, forbearance and the treatment of customers in arrears. Insurers should look at claims handling, renewal pricing and product value; the FCA's 2025 findings on home and travel claims handling set out its expectations.
The FCA expects customer outcomes to be part of the firm's culture, not a compliance overlay. FG22/5 describes four elements: a purpose consistent with the Duty, leadership that is competent and accountable for outcomes, people management and reward that reflect good outcomes, and governance that identifies poor outcomes and drives remediation.
Culture has to be evidenced. The July 2026 outcomes monitoring findings noted that firms described and trained on culture but rarely showed how it affected decisions, accountability or incentives. Useful evidence includes decisions where the firm accepted lower revenue to improve outcomes, changes to incentive schemes, and board minutes showing outcome data shaping strategy.
The FCA supervises the Duty through its portfolio approach: data requests, multi-firm reviews, firm-specific reviews and the board report. Where it finds poor outcomes, it looks at the root cause and at whether the firm should have identified the harm itself.
Firms that identify and fix issues themselves, and can show the evidence, are in a far stronger position than firms where the FCA finds the issue first.
Outcome monitoring is only as good as the data behind it. Firms should document data sources, definitions and known limitations, reconcile key figures, and supplement quantitative data with qualitative checks such as call listening and file reviews.
Board information built on unreliable data can mislead. In the July 2026 findings, one firm improved transaction categorisation accuracy by 12.8% through rule changes, which in turn made its outcome data more reliable.
Under PRIN 2A.8, the board or equivalent governing body must review and approve, at least annually, an assessment of whether the firm is delivering good outcomes for retail customers. The report should draw on outcome monitoring, identify where outcomes are poor or differ between groups, set out the actions taken or planned, and inform the firm's business strategy.
The report is not submitted to the FCA, but the FCA can request it at any time. The FCA's December 2024 good and poor practice publication on board reports, and the July 2026 outcomes monitoring findings, both noted boards that approved reports without challenging them. Board minutes should show the challenge and the decisions that followed.
The FCA expects firms with a board to appoint a board-level Consumer Duty champion, ideally a non-executive director, to help the chair and CEO keep the Duty on the agenda. The champion supports board challenge; collective board accountability and first-line ownership remain.
In firms under the Senior Managers and Certification Regime, Conduct Rule 6 requires staff to act to deliver good outcomes for retail customers. Senior managers are accountable for the areas in their statements of responsibilities, and systemic shortfalls in Duty compliance can raise conduct or fitness and propriety questions. The FCA's PS26/6 changes to the regime took effect in stages between 24 April and 1 September 2026; the firm's guide to SM&CR in 2026 covers them.
Payment and e-money institutions are not under SM&CR, but the Duty applies to them in full. Accountability should be set out in their governance arrangements and role descriptions instead.
Complaints are one of the richest sources of outcome data. Firms should analyse themes and root causes across complaints, not only resolve each one, and use the findings to fix the underlying product, communication or process. The FCA's December 2024 publication on complaints and root cause analysis sets out good practice.
Low complaint volumes need careful interpretation: they can reflect good outcomes or barriers to complaining. New FCA complaints reporting rules under PS25/19 apply from the reporting period starting 1 January 2027. The firm's article on complaints handling and the new reporting requirements covers the changes.
Where a firm finds that customers have suffered foreseeable harm, it should identify the affected population, put the harm right fairly and promptly, and fix the root cause. That includes customers who have not complained. The redress approach should be documented, including how the firm calculated amounts and contacted customers.
Firms should also consider whether the issue is significant enough to notify the FCA. The FCA and the Financial Ombudsman Service consulted on modernising the redress system in CP26/9, with further updates planned for the second half of 2026.
Operational disruption harms customers, and the Duty applies to how firms prepare for and respond to it. Resilience planning should consider vulnerable and time-critical customers, such as those who rely on a payment account for wages or benefits. Outsourced service disruption remains the firm's responsibility.
The Duty should also be built into change management. New products, pricing changes, technology changes and new distribution arrangements should be assessed against all four outcomes before launch and reviewed after launch. A short Duty assessment in the change approval template is the simplest way to make this routine.
Information shared between firms in a distribution chain should be relevant to outcomes, with materiality thresholds and frequency agreed in advance. Arrangements should cover appointed representatives, brokers, introducers and outsourced service providers.
Firms should review the information they receive and act on it. A manufacturer that receives distributor reports but never changes anything as a result is not using the information as the Duty intends.
Training should be role-specific. Customer-facing staff need to recognise vulnerability and know how to escalate. Product, pricing and marketing teams need to apply the outcomes in their decisions. Senior managers and board members need enough understanding to challenge outcome data and the board report.
Evidence and controls should match the scale, complexity and customer base of the retail business. A small firm with one simple product needs a lighter framework than a bank with hundreds of products. Proportionality is not a reason to have no evidence, and firms should reuse existing controls in sourcebooks such as PROD, CONC, ICOBS, COBS and BCOBS rather than build parallel processes.
The Duty sits alongside existing sector rules; it does not replace them. It works best when integrated into the firm's existing product governance, complaints, conduct risk and compliance monitoring frameworks.
Payment and e-money firms have specific considerations, covered in the firm's article on how EMIs and payment institutions implement the Consumer Duty.
Buckingham Capital Consulting carries out full and targeted Consumer Duty reviews, designs outcome monitoring and management information, supports board report preparation and runs remediation programmes. It also delivers role-specific Consumer Duty training for boards, senior managers and customer-facing teams. Details are on the firm's Consumer Duty page.
Products and services, price and value, consumer understanding and consumer support. Each applies with the same expectation that vulnerable customers receive outcomes as good as other customers.
On 31 July 2023 for products and services open to sale or renewal, and on 31 July 2024 for closed products and services.
Every firm in scope needs its board or governing body to review and approve an annual assessment of whether it is delivering good outcomes. The format can be proportionate to the firm.
No. There is no routine submission, but the FCA can ask to see the board report and the evidence behind it at any time.
Yes, where they serve retail customers. For payments and e-money, retail customers include consumers, micro-enterprises and small charities.
The core rules are unchanged. CP26/23 has proposed changes to the distribution chain rules and to scope for non-UK customers, with policy statements planned for late 2026 and early 2027.
It sets a higher standard and requires firms to evidence actual customer outcomes, not only fair processes. Principle 12 replaces Principles 6 and 7 for in-scope retail business.
No. It sits alongside sector rules such as BCOBS, CONC, COBS, ICOBS, MCOB and the payment services requirements.
Buckingham Capital Consulting has obtained FCA authorisations for retail payment, e-money and lending businesses including Dzing Finance, Hryze and Oval since 2013, and builds the Consumer Duty framework, outcome monitoring and board reporting those firms run on. It also carries out independent Consumer Duty reviews, remediation and training for authorised firms.
Speak to an expert: WhatsApp +44 7563 115980, Telegram @buckinghamcapital or info@buckinghamcapitalconsulting.co.uk.
This article is general information, reviewed against the regulator’s published requirements on the date shown. It is not legal advice; the regulator’s current publications take precedence.