We expect all consumer credit firms that we regulate to treat their customers fairly. Find out more about what we expect and how to assess compliance.
Treating customers fairly is a fundamental principle for all regulated businesses. The full list of principles is available in our Handbook. You are expected to comply with these principles at all times.
Please refer to our Fair treatment of customers page for a full explanation of what is expected of regulated firms.
When you apply for authorisation we will ask you how your firm ensures that it treats its customers fairly.
The amount of information you will have to provide depends on whether you apply for limited or full permission.
When assessing applications, we review a number of different factors relating to how your firm puts the fair treatment of customers at the heart of its business. These include:
- business plan - including details such as: what your firms intends to do, how it will generate business, how it will conduct business and what its target market is
- key touch points with customers – from your financial promotions and initial engagement, to the conclusion of the relationship
- eligibility criteria – eg for lending permissions, this would include affordability assessments; for debt permissions, this could include an assessment of indebtedness and advice
- relationship management – how your firm conducts and maintains relationships with customers – including when things go wrong (eg forbearance, financial difficulties, collection process, etc)
- compliance – that your firm’s policies and procedures are compliant with our Consumer Credit Sourcebook (CONC) and other relevant handbook rules
- systems and controls/organisational structure – that your firm has sufficient resources to be able to conduct the regulated activities in line with its business plan
Understanding this requirement
To increase your understanding of our requirement to treat customers fairly you should take these three steps:
Step 1: Understand our rulebook
Principle six: ‘A firm must pay due regard to the interest of its customers and treat them fairly’.
Several of the underlying rules in our Consumer Credit Sourcebook also relate to the fair treatment of customers.
Step 2: Understand our six consumer outcomes
Our six consumer outcomes illustrate what treating customers fairly means in practice.
However, all firms are different, so you should only look at the outcomes as an illustration of what we will look for in your firm’s business, and see how they apply to you.
Step 3: Understand how to use management information
We look at how firms use the information they collect in their business to assess whether they are treating their customers fairly.
Read treating customers fairly - guide to management information. This was produced by the FSA in 2007 but remains relevant, as it can help firms develop their management information and includes hints and tips, along with examples of good and poor practice.