P2P platforms welcome “obvious” rules of new Consumer Duty
Peer-to-peer lending platforms have welcomed the new Consumer Duty outlined by the City regulator, while pointing out that most alternative lenders are already compliant with the incoming rules.
Last month, the Financial Conduct Authority (FCA) released its long-awaited Consumer Duty, which aims to improve how regulated firms – including P2P lending platforms – serve customers.
It will include requirements for firms to end rip-off charges and fees, make it easier to switch or cancel products, and provide helpful and accessible customer support.
But while the FCA said that the new rules will “lead to a major shift in financial services”, P2P platform heads have pointed out that they are largely complaint with the rules already.
“I think it is a sad state of affairs if the regulator has to regulate something that should be obvious to all regulated firms,” said Filip Karadaghi, managing director of LandlordInvest.
Read more: FCA targets “major shift in financial services” with new Consumer Duty
“It has no impact on LandlordInvest as we have always put our clients first (as evidenced by one formal customer complaint over more than five years trading).”
Consumer lending platform Plend – which won FCA authorisation earlier this year – said that its customers are already treated in line with the new principles.
“The consumer duty makes the continuation of a larger challenge for the financial services industry, by providing further protection for consumers and regard for their wellbeing and outcomes,” said Sarah Davies, head of compliance at Plend.
“Plend’s approach to more inclusive outcomes, alongside our close association with Responsible Finance, Fair By Design and our unique status as a B Corp, ensures customers are already treated in line with these new principles, providing us with an excellent starting position for implementing any additional technical requirements from the regulator.”
Read more: Fitness and propriety top whistleblowers’ concerns about regulated firms
Meanwhile, Nicola Horlick, chief executive of Money & Co, said that she is “fully supportive of anything that provides greater protection for consumers.”
“We have to understand that there are unscrupulous people out there who will take advantage of people who are not financially literate,” she said.
“The new rules particularly seek to protect the vulnerable and that is increasingly important as there are now so many more people living very long lives and so a higher instance of dementia.
“It is incumbent on financial firms to assess whether someone has the capacity to make a decision about their investments and that is quite right.”
Read more: New Consumer Duty is “a Trojan horse”