5 free questions on The Consumer Duty, part of learning outcome 7 (The advice framework). Pick an answer to check it, or open the answer to see why each option is right or wrong.
Question 1 of 5
When did the Consumer Duty come into force for new and existing products, and for closed books?
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The answer is C: 31 July 2023 for new and existing; 31 July 2024 for closed books
The Duty applied from 31 July 2023 to new and existing products and services, and from 31 July 2024 to closed books.
Why the other options are wrong
A
31 December 2012 was the RDR date.
B
1 January 2023 isn't the date.
D
The dates are a year earlier.
Question 2 of 5
Which of these is one of the Consumer Duty's three cross-cutting rules?
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The answer is B: Avoid causing foreseeable harm to retail customers
The three cross-cutting rules are: act in good faith; avoid causing foreseeable harm; and enable and support retail customers to pursue their financial objectives.
Why the other options are wrong
A
Fair value isn't the same as the cheapest price.
C
Returns can't be guaranteed.
D
Face-to-face meetings aren't required.
Question 3 of 5
Which of these is an example of foreseeable harm under the Consumer Duty?
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The answer is B: A cancellation process so complicated that customers can't cancel
Foreseeable harm includes overly complex cancellation, distributing products outside their target market, and support that vulnerable customers can't access.
Why the other options are wrong
A
A suitable cautious choice isn't harm.
C
Disclosed market risk isn't foreseeable harm caused by the firm.
D
A properly notified fee that still gives fair value isn't in itself harm.
Question 4 of 5
Which individual conduct rule was introduced alongside the Consumer Duty?
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The answer is D: You must act to deliver good outcomes for retail customers
Conduct rule 6, 'You must act to deliver good outcomes for retail customers', was added to coincide with the Duty.
Why the other options are wrong
A
Market conduct is conduct rule 5.
B
Acting with integrity is conduct rule 1.
C
Being open with regulators is conduct rule 3.
Question 5 of 5
How does the consumer understanding outcome go further than Principle 7's 'clear, fair and not misleading' standard?
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The answer is B: Communications must be tailored, tested and likely to be understood
Firms must make communications meet customers' information needs, be likely to be understood, equip them to make informed decisions, and test and adapt them, considering vulnerability.
Why the other options are wrong
A
Risk warnings remain important.
C
Communications needn't all be written.
D
It builds on and goes beyond Principle 7.
Practise all 14 The Consumer Duty questions
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