Financial Services New Legal Duty of Care

Published / Last Updated on 13/05/2019

The Treasury Committee report “Consumers access to financial services” has been published today.

In short, MPs suggest that the Financial Conduct Authority (FCA) be given more powers to ensure that a legal duty of care imposed on financial services firms after MPs had raised concerns that financial service providers are not currently required to act in their client’s best interest.

The report goes on to say “the committee would support a legal duty of care as a legal obligation for firms if the FCA cannot enforce such behaviour”.

The report also suggests that financial service firms publish the size of their loyalty penalties to consumers.  We have all seen the incentive deals offered to ‘new clients’ at the expense of existing, loyal clients who are not offered similar terms, in effect a ‘loyalty penalty’.  The Treasury Committee want this changed by forcing financial services firms to publish average loyalty penalties.

A range of enforcement powers the Equality and Human Rights Commission (EHRC) have under the Equality Act 2010 have also been discussed within the report, suggesting service providers make reasonable adjustments for individuals, including;

  • Tactile bank cards and Braille (i.e. raised/you can touch it)
  • Moon tactile font communications (symbols based on raised lines and curves to represent letters, numbers and punctuation marks that again you can touch)
  • Providing interpreters

The committee wants to enforce compliance with the Equality Act but suggest it be passed to the FCA or the Financial Ombudsman Service (FOS) due to a lack of resources that the EHRC has, and the volume of individual cases that EHRC would be expected to handle if they took on financial services complaints

The committee finished by saying “the FCA and FOS should be given legal powers to take on cases on behalf of consumers”.

Cost of the Loyalty

Citizens Advice Bureau (CAB) research suggests that the cost of being a long-standing customer could be close to £1,000 extra per year and the Competition and Markets Authority (CMA) found that vulnerable people are at more at risk of paying the loyalty penalty.


We have long campaigned that financial services companies do not treat existing clients fairly.  Whether that be insurance renewal, or older management fees on legacy investment and pension policies versus new style pensions and investments through to the New Business Telephone Call centre answering calls within seconds versus the existing client line behind held in a call queue with that annoying message “all lines are busy, you are 46th in the queue”.

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