Treating Customers Fairly
We followed the FSA’s integration of the regulatory principle of Treating Customers Fairly (TCF) into the FSA’s firm supervision process (ARROW). We supported the FSA’s move to incorporate TCF into mainstream supervision work in particular, because firms would appreciate more immediate feedback.
The Panel has consistently voiced its concern that, firstly, the TCF project had not been subject to any market failure or cost benefit analysis by the FSA and, secondly, that it had been inappropriately ‘read-across’ to all sectors of the financial services industry, and in particular to areas where there was no evidence of consumer detriment.
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What the SBPP has said previously on this topic:
In July 2008 the Panel remained supportive of the TCF initiative, but continued to be concerned about its direction and the consistency and proportionality with which it is being applied to smaller firms.
By 31 March 2008 all firms were required to implement their TCF strategies, with a further deadline of December 2008 by which all firms should be able to demonstrate, through their management information, that they are consistently treating their customers fairly.
The Panel expressed concern at the commencement of this project that the FSA had not been clear in its definition and direction of the TCF concept. However, during 2007 the Panel was pleased to report that this situation improved somewhat.