18 Aug 2016

Client Briefing: Compliance, Conduct and Risk Bulletin August 2016

Client Briefing: Compliance, Conduct and Risk Bulletin August 2016

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Financial Distress and Consumer Credit 

An Occasional Paper, produced by the FCA, using data from the ONS Wealth and Assets Survey, has found that 61% of individuals in Great Britain have at least one consumer credit product and at least one in four have outstanding debt.

It has been found that, utilising a narrow definition of financial distress based on arrears, 2% of individuals with outstanding consumer credit debt are in financial distress.

Under a broader definition of financial distress, it is estimated that 17% of individuals with outstanding consumer credit debt face moderate or severe financial distress.

The debt-to-income ratio is considered to be a strong predictor of future financial distress.

It was discovered that individuals who hold the majority of their debts in higher-cost products are more likely to suffer financial distress than holders of other forms of credit, for example personal loans. 

Find out more: Financial Conduct Authority 

Feedback on proposed changes to handbook relating to rules and guidance on payment protection insurance complaints

The FCA have published a paper outlining feedback received on proposed changes to PPI complaints procedure.

These proposals are in relation to 3 key aspects of the rules and guidance:

  • to include profit share in our approach to the assessment of fairness and redress
  • to allow previous rebates to a consumer when they cancelled their PPI policy to be partly reflected in (and so reduce) any redress due
  • to clarify how firms should assess fairness and redress where commission or profit share rates vary during the life of the PPI policy

Find out more: Financial Conduct Authority 

Getting Culture and Conduct Right - Speech delivered by Jonathan Davidson, Director of Supervision – retail and authorisations at the FCA

Jonathan Davidson from the FCA delivered a speech at the the 2nd Annual Culture and Conduct Forum for the Financial Services Industry in London.

The speech focused on the ‘getting culture and conduct right’ and in particular the FCA’s role within that.  The following topics were covered:

  • why culture is so important to the FCA
  • how a firm’s culture is assessed
  • what the FCA are doing to reinforce appropriate conduct culture

Find out more: Financial Conduct Authority 


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