UK’s FCA: eMoney CEOs Must Make Consumer Duty Rules ‘Top Priority’

A British regulator has told eMoney firms that they need to change some practices.

Financial Conduct Authority (FCA) Director of Payment and Digital Assets Matthew Long sent a letter to eMoney company CEOs and directors on Tuesday (Feb. 21) ahead of new Consumer Duty rules that are to take effect on July 31.

“For many firms, meeting the Duty will require a significant shift in culture and behaviour,” Long wrote in the letter.

The Consumer Duty is a cornerstone of the FCA’s strategy to set higher consumer protection standards for financial institutions.

Long’s letter comes about a month after a Jan. 25 post on the FCA website in which the organization highlighted areas of focus it said it would like firms to prioritize following its review of the implementation as of that time.

The duty introduces new rules around products and services, price and value, consumer understanding and consumer support, Long wrote in his Tuesday letter.

Among the suggestion Long makes in the letter are that eMoney firms provide several different methods of customer authentication, including some that don’t require a mobile phone; ensure their charges and fees are in line with the firm’s actual costs; make it clear to customers which products are regulated and which are not, and provide customer support through a variety of channels — not just online.

Long also said firms should consider how they handle alleged cases of fraud, especially authorized push payment fraud.

“Whilst we appreciate that the facts of these can be hard to establish, firms should ensure that their treatment of customers who feel themselves to be victims and are distressed is not unduly harsh or unsupportive,” Long wrote.

It was reported in June that the U.K. is experiencing a widespread “epidemic” of authorized push payment fraud in which scammers trick victims into sending money into fraudsters’ accounts.

There was a 40% increase in this type of scam in 2021, according to the report.

“We expect the Consumer Duty to be a top priority for you personally,” Long said in the letter. “We want good outcomes for customers to be at the heart of firms’ strategies and business objectives, and leaders have a key role to play here.”