 Savings providers will soon have to make sure customers are made aware of newly available interest rates , as well as inform them of deals that could leave them better off, according to new rules by the FCA. Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), wrote to the Treasury Committee ahead of a new consumer duty, which is due to come into force at the end of July. The new duty will require financial firms to put customers at the heart of what they do, setting higher and clearer standards. In the letter, Mr Rathi said: "We welcome that many firms have acted in advance of the consumer duty to simplify their product ranges and equalise rates between on and off-sale savings accounts. "We will monitor firms' actions to comply with the duty and take appropriate steps, including enforcement action if appropriate, if we find they are consistently not providing good outcomes for their customers." Mr Rathi said the higher standards mean "we will expect firms to have a strategy to ensure their customers are adequately informed of available rates across their product set and how they may benefit from switching to an alternative". He said firms will need to go further than simply notifying a customer when a product matures in order to be compliant, adding: "This includes identifying groups of customers who may be better served by a higher rate product and considering what additional steps they can take to support these customers in switching where appropriate." This comes following concerns raised by the Treasury Committee that borrowing costs are rising faster than savings interest rates, which has seen it press providers on the issue. According to figures released by Moneyfactscompare.co.uk on Tuesday, the average two-year fixed-rate mortgage has hit 6.78 percent, while the average easy access savings rate rests at a more modest 2.62 percent.){kind=link}
Savings firms ordered to inform customers of best available rates as watchdog intervenes (Image: PA) Savings providers will soon have to make sure customers are made aware of newly available interest rates , as well as inform them of deals that could leave them better off, according to new rules by the FCA. Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), wrote to the Treasury Committee ahead of a new consumer duty, which is due to come into force at the end of July. The new duty will require financial firms to put customers at the heart of what they do, setting higher and clearer standards. In the letter, Mr Rathi said: “We welcome that many firms have acted in advance of the consumer duty to simplify their product ranges and equalise rates between on and off-sale savings accounts. “We will monitor firms’ actions to comply with the duty and take appropriate steps, including enforcement action if appropriate, if we find they are consistently not providing good outcomes for their customers.” Mr Rathi said the higher standards mean “we will expect firms to have a strategy to ensure their customers are adequately informed of available rates across their product set and how they may benefit from switching to an alternative”. He said firms will need to go further than simply notifying a customer when a product matures in order to be compliant, adding: “This includes identifying groups of customers who may be better served by a higher rate product and considering what additional steps they can take to support these customers in switching where appropriate.” This comes following concerns raised by the Treasury Committee that borrowing costs are rising faster than savings interest rates, which has seen it press providers on the issue. According to figures released by Moneyfactscompare.co.uk on Tuesday, the average two-year fixed-rate mortgage has hit 6.78 percent, while the average easy access savings rate rests at a more modest 2.62 percent.
Savings firms ordered to inform customers of best available rates
Sourceexpress.co.uk
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