Consumer Duty one year on: what mortgage firms are still getting wrong

Consumer Duty came into force in July 2023 with a clear message from the FCA: firms must be able to demonstrate they are consistently delivering good outcomes for retail customers. Over a year on, the FCA's supervisory activity is revealing a consistent pattern of gaps — and mortgage firms are among those most exposed.

The most common failures fall into three categories. First, outcome monitoring: firms have policies and frameworks on paper, but cannot produce evidence that outcomes are being measured at case level. Second, vulnerable customer identification: firms acknowledge the obligation but lack a systematic process for flagging and documenting vulnerability indicators within case files. Third, suitability justification: adviser notes still routinely fail to explain why a recommended product is in the customer's best interest in sufficient detail to satisfy a supervisory reviewer.

The firms performing well under Consumer Duty are not necessarily those with the most sophisticated compliance teams — they are the ones who have made good outcome delivery a measurable, auditable process. Every case reviewed. Every vulnerability flag documented. Every suitability justification captured in a structured, retrievable format. The FCA has made clear it will be asking to see the evidence. The question is whether firms can produce it.