FCA praises lenders for consumer understanding checks

Retail banks and building societies are doing a good job in checking consumers understand the products they are buying, the FCA says.

The regulator says these firms are increasingly rolling out ways of working to judge consumer understanding of products through the whole lifecycle.

The FCA made the statement following a thematic review into the issue.

The regulator adds that some lenders have “made good progress in developing practices to help ensure their customers have a reasonable opportunity to understand the products they have bought”.

However, the FCA also said a few firms “continue to confuse customer understanding with customer satisfaction”.

The regulator also found the most in-depth lender systems for checking understanding were taken after the sale.

The FCA said these checks were least developed in online sales, but that it had noted improvement in this area.

The FCA says it is keeping a watching brief on the issue.

The regulator studied 18 banks and building societies for the review.