The FCA has warned finance firms to ensure they put customers’ needs first and avoid foreseeable harm, including those in vulnerable circumstances.
It said firms will face enforcement action if they are found to have let customers down.
The regulator has published the warning as people face increased costs for utility bills, food and fuel because of the conflict in the Middle East.
In a note to firms Charlotte Clark, director of cross-cutting policy and strategy, set out the support the regulator expect firms to offer consumers, as part of its rules and the Consumer Duty.
She said the Duty requires firms to put customers’ needs first and avoid foreseeable harm, including those in vulnerable circumstances. She told firms: “We expect you to have embedded the Duty and to monitor outcomes actively, identifying where consumers are at risk of harm in a rapidly changing environment.”
She said firms should be able to evidence how they are monitoring outcomes and how they are continuing to meet customer needs.
Ms Clark added: “We will use our supervisory and, where appropriate, enforcement powers when we see poor outcomes or inadequate action.”
In the detailed note the FCA said firms must check that products and services still meet the needs, characteristics and objectives of their target market as circumstances change. That includes checking that product features are not causing harm, including to customers in or approaching financial difficulty, or to those who need extra help.
Firms must also regularly review whether customers still receive fair value as circumstances change. Firms must keep monitoring outcomes for higher-risk customer groups and act if they find that a product no longer offers fair value.
Firms were also told to test communications, including digital journeys and scripts, to make sure customers understand key terms, the consequences of inaction and the support available.
The regulator said the Consumer Duty requires firms to keep support accessible and effective as customers’ needs change. For example, call waiting times and transfers shouldn’t create unreasonable friction. Staff should be empowered to recognise vulnerability and take ownership of resolving issues. Firms should also offer support through channels that work for customers.