Treating Customers Fairly (TCF) is an FCA initiative designed to promote fair outcomes for customers.
The TCF initiative outlines 6 customer outcomes that all firms should focus on achieving. Here is a summary of each outcome:
- Customers should be confident that fair treatment is at the centre of the company’s corporate culture
- The products or services that are being sold should meet the needs of the targeted consumer groups and marketed accordingly
- The information that is provided to customers should be clear and concise. Customers should also be kept informed throughout the full sales process.
- Any advice given to customers should be suitable to their circumstances
- Any products or services sold to consumers should perform as firms have led them to expect.
- If a consumer would like to change a product, switch provider, submit a claim or make a complaint they should be able to do so without any unreasonable post-sale barriers from the company.
All firms should aim to make TCF an integral part of their company culture and apply these principles to their internal policies.
Treating Customers Fairly is an ongoing process and something which all companies should be looking to improve on with time.
Treating Customers Fairly in Financial Services
In the past, the financial services sector has come under scrutiny for some of the practices being used. Broker fees, payday loans, PPI and overdraft charges have all come under the FCA’s spotlight as many believe they fail to meet the outcomes aligned in the TCF guidelines.
It’s important to remember that Treating Customers Fairly is not simply a phrase, but instead a formal requirement.
So how can a financial services company ensure they are treating customers fairly?
Integrity and Honesty
It is the job of the company to ensure that integrity and honesty is at the heart of everything they do. The FCA does not want companies to do the right thing because they have been told to, but because it’s second-nature.
Companies should ensure that any financial service they sell is affordable to the customer. In the case of a loans company, this will often mean conducting an income and expenditure check to ensure that the customer can afford the repayments. It is also important to ensure that the consumer is not unknowingly sold any other products or add-ons as part of the agreement (think PPI).
Companies should no longer be hiding any important information in the small print. They should instead make customers aware of all key points of the agreement. In the case of loans, this will include the total cost of borrowing, the APR, a representative example and any fees or charges.
Advice vs. Guidance
It is important for a financial services company to remember that they are not a financial advice service. If a customer is seeking guidance surround the company’s product or services, then the advice the company gives should be suitable and should take into account the individual’s circumstances. If a customer is seeking general financial advice, this should be left to financial advisors.
No hidden extras
The product or service that a company is offering should ‘do what it says on the tin’. There should be no hidden fees or charges. If the monthly repayments are fixed, then the customer should expect to pay the same every month.
As a company, you should make it easy for a customer to make a complaint. You should also make sure that you deliver a response to this complaint in an efficient and professional manner. You should also make the customer aware of any cooling off period and allow them to easily cancel if it’s within this period.
To learn more about Treating Customers Fairly, please visit the fca.org.uk.