Treating Customers Fairly TCF Procedures and Guidance | Staff Training and Awareness | Record Keeping and Management Information MI | Mortgage Conduct of Business MCOB | Template for FCA Applications and Authorised Firms

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16.3.1 TCF Procedure Guidance

[KYC Author Note: We have not included a TCF Procedure template in this manual as the exact procedures on implementing, maintaining and monitoring TCF will differ greatly from company to company. However, we have provided you with some information and guidance below on creating TCF procedures.

Procedures usually govern one area or function of a business and so are quite simple to construct and follow, however TCF is an entire area that covers nearly all of your business processes and activities and as such it can be harder to set procedures that are easily identified and followed by your staff. For example, creating a procedure for how you assess TCF during your employee’s phone calls is fairly straightforward, however writing a procedure for how TCF functions across your business as a whole, is slightly more complicated.

For this reason, TCF should be approached in sections, usually those defined below, and you should be looking to create procedures for how TCF is at the core of each of these areas. It is not necessary to create separate TCF procedures for each area as you will most likely already have procedures in place for each of the below. You can therefore just add TCF sections to each existing procedure which define how you implement, assess, review, maintain and monitor compliance with the TCF principles for each business activity.

E.g. You should already have a complaint handling procedure, which aids in the compliance with the TCF principles by ensuring that customers have a barrier free way to raise a concern should they have one. What you should do is to is add a TCF section to your existing complaints handling procedure which goes into further detail on how you embed the TCF principles and ethics into your compliant handling and how you ensure that TCF is at the forefront of complaint handling.  

• Staff Training & Awareness – you should have procedures which detail what TCF training your staff receive, how often, when and where. Procedures should also show that you are testing your staff’s knowledge with regards to their TCF understanding and how they evaluate the TCF training to ensure that it is relevant and effective.
• TCF Self-Assessment – we have included a TCF self-assessment checklist in this manual, however you should also be following a set of procedures for completing the assessments so that no areas get missed, gap analysis can be performed and you can evidence your assessments and ongoing progress.
• Advice, Sales & Marketing – You should have clear procedures already in place for how your staff approach sales and giving advice. This can involve the use of pre-approved scripts and screen prompts. There should also be marketing procedures in place which detail the steps involved in completing a marketing campaign. These procedures need a TCF element which should how you consider the TCF principles within the steps and how each step complies with the 6 outcomes and general TCF principles.
• Complaint Handling – Complaint handling is a large area for TCF as it directly involves how a consumer is treated before, during and after they raise a concern. Your procedures should consider how you meet the TCF requirements and ensure that barriers are removed for consumer contact and complaints. Procedures should involve how you measure the level and basis of complaints, how effective and fair your processes are, how you identify areas raised as a concern and address any gaps in your business processes and how your complaints procedures are made easily accessible to all customers.
• Staff Incentives & Remuneration – applying the TCF principles to consumers means that all advice, services, products and after care provisions should be clear, relevant, transparent, open, fit for purpose and appropriate. How your staff are remunerated, and incentives could have an impact on the type of advice/service that the consumer receives and so your procedures in this area need to be robust, strict and effective. Staff should not be swayed to alter their compliant approach to advising or selling by gaining extra money, benefits or perks. Not only should your procedures make this clear to your staff, they should also seek to minimise the risk of this happening in the first place.
• Audits & Monitoring – audit procedures are the backbone of any compliance program as they ensure that the controls, procedures and measures you have in place are suitable, effective and compliant. The same goes for any TCF related activity so you need robust, structured and detailed procedures in place for how you audit all business areas that have a TCF compliance implication.
• Record Keeping & Management Information (MI) – keeping records is an essential business practice and does not just relates to the policy and procedures documents that you keep. There are legal, statutory and regulatory requirements surrounding record keeping and retention periods that must be followed and your procedures in this area should be tried and tested. With regards to TCF, records of all related procedures, training programs, audits, assessments, logs and manuals should be retained so as to evidence your ongoing commitment to and compliance with the TCF standards, principles and expectations.

Your TCF Procedures are bespoke and specific to your firm and business type, however there are certain generic sections that should be included as a standard part of your procedural measures.

Sections that should be included alongside your own business functions are: –

• Material & Content Assessment – all financial promotions, emails and website content, marketing and advertising materials should be reviewed and assessed for compliance with the 6 TCF outcomes and the FCA standards and principles for treating customers fairly. They should also be fit for purpose, be appropriate for the target audience and be clear, transparent and not misleading.
• Staff Advice – all staff who provide debt, financial or credit advice or sales information must be fully trained and knowledgeable about the products/services that they sell and promote. Staff should be provided with in-depth TCF and product training on a rolling basis to ensure that their regulatory understanding and competency are up-to-date, consistent and compliant. Staff assessments, coaching and appraisals should be provided at least quarterly and results/feedback recorded and maintained for pattern and gap analysis.
• Post-Sale – TCF expands to include all post-sale activities where customers must be provided with suitable and clear contact methods and information, including any financial constraints and/or consequences relating to the breach of any consumer-credit contract or agreement. No post-sale barriers must exist and after sale staff should follow procedures that ensure the fair treatment of customers and adherence to the FCA regulatory requirements and 6 TCF outcomes.
• Management Information – MI should be gathered, recorded and assessed to ensure that the TCF regulatory requirements are being followed and complied with and should also be used to assess and mitigate against gaps. MI should enable the company to make informed decisions that are in the best interests of the customers and provide Directors and/or board members with regular reports on TCF implementation, outcomes and objectives. [KYC End of Author Note:]

16.4 Treating Customers Fairly Audit

The company carries out regular audits on all processes, including on our Treating Customer Fairly (TCF) measures, controls and procedures. We utilise an audit checklist for this review and then complete a gap analysis report and an action plan based on area areas of non-compliance or where improvements are identified.

Our TCF audit checklist is retained externally from our manual for ease of use, recording and maintaining.

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[We have included a template for this document in 06_Checklists]