Consumer Protection Code – Your Rights

Financial services firms – including banks, insurance companies, investment firms and brokers – have a responsibility to help consumers make informed decisions about their money.

Under the Consumer Protection Code, firms must secure customers’ interests and inform them effectively. Firms also need to gather sufficient information from consumers, taking their preferences into account when preparing suitability assessments for many products and services.

Securing customers’ interests

Customers’ interests are best served by sustainably-profitable, resilient, well-run, consumer-focused firms.

Financial services firms should provide clear information to:

• Help you understand the products and services you're considering
• Support your decision-making
• Ensure they don’t take advantage of your habits, preferences, or natural biases in a way that could lead to poor outcomes for you.

As a consumer, you have the right to choose which financial products and services suit your needs and financial goals.

When dealing with financial services providers, you should expect help understanding products and services, and you should expect firms to act in ways that support you in making choices that match your needs and financial objectives.

Informing Effectively 

The Consumer Protection Code includes Standards for Business, which require firms to inform their customers effectively in their disclosures and communications. This shifts the focus of firms from meeting disclosure requirements in a “tick-box” way as an exercise in compliance, to presenting information to customers in a way that informs them effectively.

The Code requires firms to act in the best interests of consumers, treating them fairly and professionally while acting with honesty and integrity.

Financial services firms need to ensure their communications – such as terms and conditions, and marketing materials – are:

• Written in plain and accessible language – avoiding unnecessary technical terms
• Clear
• Accurate
• Up-to-date.

As a customer, you can expect that the information you receive from your financial services provider is timely, clear, easy to understand, and jargon-free,  so  that you can make informed decisions and choose the financial product or service that suits your needs. 

If there is information about the product or service that you don’t understand, your financial services provider should support you in fully understanding the product features.

Suitability Assessments

Financial services firms are required to gather and record sufficient information from consumers prior to offering, recommending, arranging or providing a product or service appropriate to that consumer. The level of information gathered must be appropriate to the nature and complexity of the financial service sought by the consumer and will include details of the consumers’:

• Needs and objectives (Why do you need this product or service? What do you want to get out of it? How long do you want this product or service for?)
• Personal circumstances (age, health, knowledge/experience of this type of product or service, dependents,  employment status,  changing circumstances)
• Financial situation (sources of income, savings, existing loans or other financial products, financial commitments)
• Attitude to risk and, where relevant, the importance of capital security to the consumer (Are you willing to put your capital at risk?)

Once the firm has gathered this information, it prepares a suitability assessment.

A suitability assessment protects you by ensuring:

• You're not sold something unsuitable or too risky for your situation
• You understand what you're buying
• The product or services actually meet your needs
• You're not paying for features you don't need.

Sustainability

Firms are required to take account of customers’ sustainability preferences when undertaking suitability assessments. For example, if you would like your investment to benefit the environment, your preference may be to invest in companies that are committed to environmental causes (e.g. lowering carbon emissions, conserving natural resources, or reducing pollution).

There is also a requirement in the Consumer Protection Code for firms to ensure that their advertising does not mislead customers about the sustainability features of a product or service, the “green credentials” of the firm itself, or its business model. This is to ensure that sustainable products are accurately and fairly represented to customers to avoid the risk of “greenwashing” i.e. a firm, product or service looking more sustainable than it actually is.

The Consumer Protection Code: For clarity, for informed decision-making, for you.

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