Treating Customers Fairly
Scott and Mears Credit Services Limited (SMCSL) is authorised and regulated by the Financial Conduct Authority. Where SMCSL undertakes contracts on a white label or outsourced basis for clients, then the policies of those clients shall be adopted into this policy. SMCSL’s policies and procedures may be utilised when undertaking such work, where it has been agreed with the client that it is appropriate to do so.
What is Treating Customers Fairly (TCF)?
All firms regulated by the Financial Conduct Authority (FCA) have to abide by the FCA’s high level standards of the Principles for Businesses, known as PRIN. There are 11 Principles and these can be found in appendix 1.
The Principle we are interested in here is Principle 6 – Customers’ interests, which states: “A firm must pay due regard to the interests of its customers and treat them fairly. Other Principles that support TCF are:
- Principle 2 – Skill, care and diligence
- Principle 3 – Management and control
- Principle 7 – Communication with clients ( with regards to Arvato this means
communication with customers and clients).
TCF aims to ensure customers fully understand the features, benefits, risks and costs of the products they buy, and to ensure that customers are not sold unsuitable products.
TCF is about delivering fair outcomes for customers and is fully embedded in the culture of our firm. Our customers can be rest assured that we are:
- Honest in the way we conduct our business and how we are remunerated
- We welcome customer feedback
- Our employees are paid well
- Our employees are regularly assessed to ensure their knowledge and skills are up date.
Treating Customers Fairly does not mean:
- We create satisfied customers but a satisfied customer can still be treated unfairly without knowing
- Every firm must have an identical level of service
- The customer is not expected to make decisions.
TCF is about our culture and doing business in a way that helps ensure we treat our customers fairly.
What does fair mean to our business?
It means that our customers:
- Understand the services we offer and the prices and costs
- Receive standard documentation
- We provide clear, fair and not misleading information
- Employees have the skills and knowledge to fulfil their roles
- Understand the charges and limitations of their contracts
- Advertisements and promotions are in clear and plain language
- Complaints are dealt with in a positive and fair manner
- Who require additional assistance and also have limitations receive help and advice in making decisions.
The FCA have 6 TCF Outcomes which can be found at appendix 2. These work in conjunction with the Principles for Business. Here are examples/further information on the Consumer Outcomes in detail:
Outcome 1 – Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture:
- Senior Management (MI) demonstrate they understand TCF, what it means for the business and have ensure TCF has been implemented in all areas of the business.
- TCF is embedded within our values, culture and the way we conduct our business. This also includes when pursuing new business opportunities
- It is essential that all staff understands what TCF means for the business and role within the business
- MI is used to measure effectiveness in meeting our TCT objectives. We regularly review our MI to measure the effectiveness of TCF activities
- We keep records of our MI, raining and procedures to demonstrate to the FCA how we complete customers fairly.
Outcome 2 ‐ Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly:
- With regards to Financial Promotions (CONC 3) we ensure that all financial promotions and communications are communications are clear, fair and not misleading.
Outcome 3 ‐ Consumers are provided with clear information and kept appropriately informed before, during and after the point of sale:
- All customers are provided with appropriate disclosure documentation and adequate explanations to allow them to make an informed decision
- We ensure we keep customers informed at all times both during and after completion of contracts
- We always act with integrity in all our dealings with our customers.
Outcome 4 ‐ Where consumers receive advice, the advice is suitable and takes account of their circumstances:
- We ensure we provide suitable advice to meet our customers’ needs and where applicable keep them informed on a regular and frequent basis
- We always act with integrity on all dealings with our customers.
Outcome 5 ‐ Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect:
- We ensure our customer interactions meet customer needs
- We will inform you how our contract(s) meets your needs
- We will ensure our communications are in clear and plain language.
Outcome 6 ‐ Consumers do not face unreasonable post‐sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint:
- We treat all complaints seriously
- We ensure that we understand the customers complaint and reply within set business
Examples of Good and Bad Practices
Senior Management and all staff take into account the fair treatment of customers all their undertakings
- What can we improve and taken action(s) on?
- Record decisions and actions taken
- TCF is your responsibility
- Ensure risks are clearly explained
- Use language your customer understands
- Investigate problems identified by staff and take action to put them right.
- Senior Managers not applying conduct to themselves
- Lack of awareness of giving inappropriate information
- Failing to take action on customer feedback
- Not recording or documenting notes of customer conversations.
Any recommendations you offer the customer meet their needs
- Updating conversation notes
- Keeping a record of customer actions
- Keeping a calendar of review dates.
- Advising a course of action to the customer you would take
- Relying on others for any research
- Not having a good understanding of the products you are recommending.
Customers are provided with clear information and are kept appropriately informed before, during and after the point of completion
- Use of jargon free communications whether orally or written that clearly set out what is being offered
- Procedures in place to update customers following any course of action
- Informing customers on progress of any applications.
- Not accurately recording type of recommendation
- Not explaining product, terms, literature so customers are in an informed position
- Not informing customers of an changes i.e., costs, interest rates.
Any recommendation made is suitable and takes into account their personnel circumstances
- Ensuring all members of staff have up to date skills and knowledge
- Regular testing of knowledge with training where required
- Checking communication skills are clear, fair and not misleading both orally and written
- Explain the different options before recommending a course of action.
- Failure to update customer logs correctly with recommendation provided
- Encouraging customers to take the most expensive option
- Encouraging customers to take an unsuitable term.
Any recommendation or course of action taken performs in the way you have led customers to expect
- Delivering on what you have promised your customer
- Ensuring your recommendation meets your customer’s needs
- Having systems in place to ensure your actions are delivered in line with your customer agreements.
- Failing to ensure your customer gets an acceptable service
- Recommending products the customer does not understand.
Customers understand any restrictions and the claims process is clear including procedures
- Being clear at the point of customer application
- Ensuring customers are informed when a better product is available
- Being clear about what a customer can, or cannot afford
- Ensuring fair treatment of your customers.
- Failure to learn from past experience
- Using complaints to improve the service provided
- Using complaints to identify training needs.
|1 – Integrity||A firm must conduct its business with integrity.|
|2 – Skill, care and diligence||A firm must conduct its business with due skill, care and diligence.|
|3 – Management and control||A firm must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.|
|4 – Financial prudence||A firm must maintain adequate financial resources.|
|5 – Market conduct||A firm must observe proper standards of market conduct.|
|6 – Customers’ interests||A firm must pay due regard to the interests of its customers and treat them fairly.|
|7- Communications with clients||A firm must pay due regard to the information needs of its client, and communicate information to them in a way which is clear, fair and not misleading.|
|8 – Conflicts of interest||A firm must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.|
|9 – Customers: relationships of trust||A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions for any customer who is entitled to rely upon its judgment.|
|10 – Clients’ assets||A firm must arrange adequate protection for clients’ assets when it is responsible for them.|
|11 – Relations with regulators||A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.|
The 6 TCF Outcomes:
Outcome 1 ‐ Consumers can be confident that they are dealing with firms where the fair
treatment of customers is central to the corporate culture
Outcome 2 ‐ Products and services marketed and sold in the retail market are designed to
meet the needs of identified consumer groups and are targeted accordingly
Outcome 3 ‐ Consumers are provided with clear information and kept appropriately
informed before, during and after the point of sale
Outcome 4 ‐ Where consumers receive advice, the advice is suitable and takes account of
Outcome 5 ‐ Consumers are provided with products that perform as firms have led them to
expect, and the associated service is of an acceptable standard and as they
have been led to expect
Outcome 6 ‐ Consumers do not face unreasonable post‐sale barriers imposed by firms to
change product, switch provider, submit a claim or make a complaint