The UK Financial Services Authority has reported that it has seen an increase in commitment by financial institutions to the implementation of the treating customers fairly principle. However, the regulatory body also warned those who have failed to adopt this principle that they face tough action.
In July 2006, the Financial Services Authority (FSA) set a March 2007 deadline for firms to be implementing the necessary changes to conform to the treating customers fairly (TCF) principle. The current level of progress on TCF was set out in a report published on May 8, 2007, which indicated that 93% of major retail firms, 87% of medium sized retail firms, 74% of wholesale firms and 41% of small firms met the deadline.
To speed up the process, the FSA has now set a new December 2008 deadline for the firms to complete the required changes and to be able to demonstrate that they are consistently treating their customers fairly.
To help smaller firms, the FSA plans to expand the range of TCF online tools and begin the rollout of regional workshops. In future, small firms can expect even more focus on TCF in their dealings with the FSA.
Although many firms have made significant progress, as indicated in the report, there are still many companies which haven’t adopted the process.
The fact that a sizeable number of companies have still not put processes in place to ensure that they are treating customers fairly is a real cause for concern, said Dominic Lindley, personal finance campaigner for consumer watchdog Which? People will still be buying financial products over the coming months and these results show there is a real chance that they could unwittingly visit a company which isn’t up to scratch.
TCF is an integral part of the FSA’s retail strategy and plays a key role in its move to more principles-based regulations.