The financial sector regulator has warned fintech companies that they need a “significant cultural and behavioral shift” to avoid being strangled by tough new rules.
The Financial Conduct Authority (FCA) said it continues to see “poor financial crime controls in some payment and e-money companies” and warned that “both the company and its customers are being targeted by criminals.”
He added that he would like to see better handling of alleged fraud, especially payment fraud, and that companies should ensure that their treatment of customers who feel victimized is not “overly callous or unsupportive.”
Businesses are also disproportionately suspending customer accounts for too long without proper explanation, the FCA said.
The warning to thousands of financial services companies comes ahead of the introduction of new customer tax rules in August. This requires companies to demonstrate and justify the importance of good customer outcomes in their work.
The FCA wants to create a higher level of consumer protection in retail financial services and describes the new rules as the cornerstone of its three-year strategy to set higher standards and reduce and prevent serious harm to consumers.
This follows what the regulator has called evidence of consumer harm, including companies providing information that has been presented as misleading or difficult to understand.
The new rules require companies to explain what customers can expect from their products and services, how they intend to meet those expectations, and how effectively they do so.
The FCA said the excise tax would set “higher and clearer consumer protection standards” for financial services. Meanwhile, businesses should focus on the “real and diverse needs” of customers, including those in vulnerable situations.
It is important to note that the FCA may refuse to issue licenses to companies that do not meet the standards set out in its consumer rights handbook.
Matthew Long, a senior FCA official, told executives in a letter that the new rules would require “significant cultural and behavioral changes” for “many” companies.
The letter stated that the FCA’s review of companies’ readiness plans found that “some companies may be even further behind in their thinking and planning … tasks throughout the process.” her business.”
In a separate letter to collection agencies and debt counseling services, the FCA said it had found evidence that companies had written misleading letters to people suggesting or stating that they could sue the company.
knew, or reasonably should have known, that the option had expired.
The regulator has warned that the growing pressure on the cost of living is leading to greater risk of late payments and non-payment by customers, leading to an increase in the work of collection agencies.
“We expect companies to consider and plan for the financial and operational implications, including how
They plan to cope with the growing demand for servicing a growing number of accounts, ”the FCA said in a statement. “If companies do not do this, consumers may also receive inadequate information about how to deal with payments and may question the status of their debt.
Growing pressure to meet demand harbors “harmful approaches to unenforceable debt collection and lawsuits,” the FCA warned. He plans to keep a close eye on “how companies provide customers with appropriate leniency and support when using enforcement tools such as litigation.”
The FCA told companies that the changes would not only increase the regulatory burden, but also increase industry confidence and increase the flexibility to innovate.
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.