Banks have new duties to protect consumers —so why can’t consumers sue for breach, ask Michael Brown & Harriet Campbell
- Considers the new duties on banks, the apparent policy shift away from the private right of action, and looks at the potential consequences for both consumers and financial institutions.
Fairness to consumers and the integrity of the financial markets underpin the new duties being imposed on financial institutions in 2024. But is it fair that a consumer can only seek redress for breach from an ombudsman and not the court? And why can’t consumers have a private right of action for breach of these duties when such a right exists for breaches of other Financial Conduct Authority (FCA) rules?
The Consumer Duty & the reimbursement rules
The Consumer Duty came into force for most financial products in July 2023, and by July 2024 will be fully in force. The duty is intended to promote fairness and is ‘outcomes-based’. But if the outcome is not what the consumer wants (or the duty is breached), the consumer
