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Retail Finance round-up - 18 August 2016

Retail Finance round-up - 18 August 2016

  • United Kingdom
  • Financial institutions - Retail finance

18-08-2016

The key development this week is the publication by the CMA of the remedies implementation timetable in its retail banking investigation. The statutory deadline for implementing remedial action is 8 February 2017. The CMA intends to publish informal consultations on draft undertakings and orders between now and November 2016. Formal consultations will take place in November/December 2016.

Also of interest this week is the publication of guidance for claims management companies by the Ministry of Justice.

Regulatory updates

Government updates, legislation and case law

Industry news

 You may have missed…

New FCA website moves into its final phase

In June 2016, the FCA launched the first phase of its new website, with the exception of the News and Publications sections which are due to be moved to the new website at the end of August 2016.

The FCA has now confirmed that this work is in its final phase and will be completed by the end of August, as envisaged. Some of the improvements expected are as follows: 

  • Improved showcase of the FCA’s latest announcements and documents.
  • An improved filter and search tool making it easier to find the information required.
  • A timeline for each new publication, as they are published, showing which stage the FCA’s work is at.

As well as transitioning the remaining FCA webpages onto the new website, the FCA has also updated its Project Innovate webpage. The webpage now includes a video providing an overview of the Innovation Hub and background information on Project Innovate.

Whilst the FCA continues to welcome feedback on its new website, it has confirmed that as of September 2016 the whole website will once again sit at fca.org.uk.

CMA publishes remedies implementation timetable in retail banking investigation

Following the Competition and Markets Authority’s (CMA) final report on its investigation on the supply of retail banking services to personal current account (PCA) customers and to small and medium-sized enterprises (SMEs), the CMA has now published its timetable for the implementation of the remedies set out in the report.

The CMA’s package of remedies comprises three "foundation measures": 

  1. The development of an open banking standard.
  2. Publication of service quality information.
  3. Introduction of customer prompts to review their banking arrangements.

The CMA also decided on measures to improve the switching process, mainly through reforms to the Current Account Switch Service (CASS), measures to help PCA overdraft users, particularly the introduction of a monthly maximum charge to be set by the banks and customer prompts, and measures targeted at the specific problems in SME banking, including the development of a new comparison tool and greater transparency of terms.

The remedial measures will be implemented by orders, undertakings to be given by Bacs (in relation to the CASS) and recommendations to the FCA and HM Treasury.

The statutory deadline for implementing remedial action is 8 February 2017. The CMA intends to publish informal consultations on draft undertakings and orders between now and November 2016. Formal consultations will take place in November/December 2016.

Ministry of Justice publishes guidance aimed at claims management companies

The Ministry of Justice has published guidance aimed at claims management companies (CMCs) covering a range of aspects of claim handling. The guidance is divided into two documents: the CMR bulletin 29 and the Claims Management Regulator – misleading marketing statement guidance document.

CMR bulletin 29 highlights the following:  

  • A reminder of the rules for telemarketing and gaining consent from customers who are registered on the Telephone Preference Service, and the fact that ‘consent’ has a specific meaning and in order for it to be valid, it must be specific, informed and freely given by the consumer. CMCs are also reminded of the Privacy and Electronic Communications Regulations which also have further specific requirements in relation to consent.
  • A reminder of the Statement of Principles for letters of authority in PPI cases, which came into effect as of 1 July 2016.
  • A reminder that firms should not make misleading statements about compliance with other regulators’ codes which would imply that they are approved or connected to them, such as the Solicitors Regulation Authority.
  • A reminder of the open letter to CMCs  from the Financial Ombudsman Service (FOS) and reference to Principle 2 of the conduct rules. An additional reminder of FOS’ expectation that allegations made to customers by any firm covered by its jurisdiction must be accurate, specific and individual to the client, taking into account advice and guidance gained from past experience with the FOS. Seeking a final decision without having a clear and specific reason for disagreeing with the FOS’ initial assessment may be deemed a breach of the conduct rules.
  • Guidance from the Legal Ombudsman on customer complaints.

The guidance document on misleading statements sets out examples of the type of statements from CMCs which the CMR would deem misleading. These include: 

  • Implying that a consumer will definitely receive compensation without the necessity of proving that the product was mis-sold.
  • Misrepresenting the length of time a PPI claim can take and/or imply that there is a time limit to submit a claim.
  • Misrepresenting the size and experience of the business.
  • Misrepresenting the services provided by the business when the claim is actually passed to a solicitor.
  • Suggesting that the claim process is more difficult than it really is.
  • Giving misleading information about the amount of redress a consumer is entitled to and/or the business’s success rate.
  • Misrepresenting the fees payable by consumers or implying that the service is free when it is not.

MAS publishes SFS explanatory flyers for front-line staff

Following the announcement by the Money Advice Service (MAS) of the forthcoming new Standard Financial Statement (SFS), MAS has now published two explanatory flyers aimed at front-line advisory staff and creditor staff.

The SFS is a tool used to summarise a person's income and outgoings, along with any debts they owe. The SFS provides a single format for financial statements, allowing the debt advice sector and creditors to work together to achieve the right outcomes for consumers struggling with their finances.

Recognising that the information provided to date was mainly aimed at management rather than front-line staff, MAS has introduced these two one-page flyers to give a brief guide to the function and benefits of the new SFS from an advice agency and creditor point of view.

The SFS is due to go live on 1 March 2017, marking the beginning of a transition period during which creditors and debt advice providers will move to using the new format.

For more information contact

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