22 Sep 2023  •  Blog, Finance  •  6min read By  • Richard Scarborough

Consumer duty – is it any of your business?

Think the new Consumer Duty is none of your concern? If you offer patient finance in your practice then Head of Medenta, Richard Scarborough, encourages you to think again.

You may have heard about the new Consumer Duty in the run up to its introduction on 31st July 2023. However, you may not have paid too much attention to it as it only applies to big financial firms, doesn’t it? Not necessarily. If you offer patient finance, then it also applies to you.

What is Consumer Duty?

The Consumer Duty regulations have been introduced by the Financial Conduct Authority, which regulates the conduct of firms in the UK, following the results of its 2020 Financial Lives Survey. This survey showed only 10% of consumers ‘strongly agreed’ that they had confidence in the UK financial services industry. Concerned at such low levels of confidence, the FCA felt more needed to be done to improve matters and so introduced Consumer Duty this summer.

What does this mean?

The purpose of the new Consumer Duty is to ensure good outcomes for customers. It compels financial services companies to act in ways which ensure this is the case. According to the FCA: “Our new Consumer Duty sets higher and clearer standards of consumer protection across financial services and requires firms to put their customers’ needs first.”

Whilst as a practice offering patient finance, you may not consider yourself as a ‘financial services firm’ you are still obliged to comply with the Consumer Duty regulations. This means you are under an obligation to consider the impact any financial products and services (such as patient finance) have upon your patients.

The Consumer Duty principle is underpinned by four outcomes:

  • Products and Services
  • Price and Value
  • Consumer Understanding
  • Consumer Support

Under Consumer Duty, as well as acting to deliver good customer outcomes you are required to understand and evidence how and whether those outcomes are being met. So, it’s not enough to just do the right thing as you must be able to prove you are doing the right thing by your customers (patients).

What practical effect does this have?

As the GDC already expects dental teams to put patients’ interests first and practices are used to outcome-based regulation, the regulations are unlikely to require a major cultural shift for dental practices. However, a change to the approach practices take to patient finance may be needed as they will have to adopt the same attitude to Consumer Duty as they do for other regulation of their business. Having said that, current practises will need to be examined and new ones introduced to ensure compliance. The FCA itself warns businesses: “The higher standard of the Duty and the shift to focusing on customer outcomes will require a significant change in many firms’ cultures.

“Firms’ boards and senior management, if they haven’t already, will have to embed a culture in which good outcomes for consumers is central. People management policies and practises, including performance management and pay and bonuses will be critical to doing so. Firms can expect at every stage of the regulatory lifecycle to be asked to demonstrate how their business model, the actions they have taken, and their culture are focused on delivering good customer outcomes.”

To uncover any potential stumbling blocks, it would be helpful to put yourself in the position of a patient. This way you can test every step of their journey through the finance process to make sure it delivers good outcomes for your patients. Ask yourself questions such as: “Do my patients get the outcomes from the finance products and services I offer that I would expect?’, and “Are my patients treated the way I would want to be treated?” In addition to this ask: “Do my staff remuneration policies (particularly for Treatment Coordinators) incentivise good customer outcomes?”

Products and services

At the heart of the new regulation is the duty to ensure the needs of all your customers are being catered for. This is especially important in relation to vulnerable customers. The FCA defines a ‘vulnerable customer’ as ‘someone who, due to their personal circumstances is especially susceptible to harm, particularly when a firm is not acting with appropriate levels of care.’ They are mentioned on more than 100 occasions in the regulations so ensuring they are properly looked after is essential.

Price and value

An important aspect of offering patient finance is to ensure it represents value for money for your patients. So, you’ll need to undertake a review of the costs of the finance options you offer to confirm they yield good outcomes for your patients. You will also need to make sure you offer your patients the best options first, such as interest free before interest bearing credit.

Consumer understanding

You will need to review the way you communicate with your patients to ensure it helps them to understand the services they are buying. Also, the channels of communication you use need to be reviewed so they are suitable for vulnerable patients such as someone with dyslexia or someone who is visually impaired.

Consumer support

Do you offer your patients adequate support with the product you offer? To confirm this is the case you will need to check your phone systems, website menus and webchats to assess whether they’re easy to access and navigate. Is it easy for patients to find the information they may need on your website? Do patients know how they get help with their finance product? Does your complaints procedure meet FCA requirements? How easy is it for patients to find your complaints procedure and navigate their way through it? Do you look after your patients as much after they have signed up for finance as you did before? The answers to these questions will help you assess whether the support you offer your patients with their finance product is adequate.

For our Medenta practices we have produced an e-learning module to guide you through compliance with Consumer Duty. For more information about Consumer Duty, visit the FCA website where you can find guides and helpful suggestions as to the sorts of questions you should be asking yourself.

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