FCA Enforcement Watch 2: 11 Consumer Duty investigations open as fair value and vulnerable customers drive enforcement focus

Action required. Relevant to all retail-facing firms subject to the Consumer Duty. Firms operating wholly outside the Duty's scope need not act.

The FCA has published Enforcement Watch 2 (no formal reference number), its second edition setting out how it is supervising and enforcing the Consumer Duty in practice. Eleven open enforcement investigations into potential Consumer Duty breaches are now underway, up from six reported in the first edition. The first was opened in August 2024.

The 11 open investigations span insurance, pensions, wealth management, consumer investments, peer-to-peer lending and claims management. Fair value sits at the centre of several of them. The FCA states plainly that a product with negligible or no obvious benefit for consumers is unlikely to provide fair value at any price.

Scale of supervisory activity

Enforcement investigations are only part of the picture. The FCA made 382 supervisory interventions in the last financial year, ranging from informal conversations to the formal imposition of requirements. It has also commissioned around 30 skilled person reviews (section 166 reviews) referencing the Duty since it was introduced. A skilled person review is a significant and costly supervisory tool. The FCA's use of around 30 since the Duty was introduced indicates it is treating the Duty as a live enforcement priority, not a supervisory formality.

One supervisory intervention is expected to result in around 270,000 motorists receiving £200m in redress, following a review of insurance firms' vehicle valuations.

The FCA also used a voluntary requirement (VREQ) to stop a fund manager accepting new investors or additional capital, launching or managing new funds, and taking fees from fund assets, after the firm was unable to show it was delivering fair value or actively monitoring consumer outcomes. That firm is now in liquidation.

What the investigations cover

The FCA describes several cases in detail. In the wealth management sector, the FCA is examining high fees, financial promotions quality, and whether consumers with vulnerable characteristics experienced heightened or foreseeable harm. In peer-to-peer lending, the focus is on misleading or unclear communications and financial promotions that prevented consumers from making informed investment decisions, alongside potentially poor conflicts of interest management.

Three investigations follow a multi-firm review into home and travel insurance claims handling, which found delays, high rejection rates, inconsistent outcomes, missed complaints and incorrect claims decisions. One of those concerns whether a firm hollowed out a travel insurance product by reducing policy features. The FCA opened a formal investigation due to the serious nature of the issues and to enable full examination of that practice.

Two investigations concern claims management companies in the motor finance sector. The FCA took the unusual step of announcing both publicly so that customers could consider their options, including whether to complain.

The investigation into The Claims Protection Agency Limited was announced in January 2026. A VREQ accepted in August 2025 had already stopped the firm onboarding new customers and required it to withdraw its existing financial promotions. The FCA is examining what customers were told about potential redress amounts, whether they were told they could make a claim for free, and whether they were pressurised to sign up.

The investigation into Consultation Claims Limited was announced publicly on 4 June 2026. It concerns allegations that between April and December 2025 consumers were signed up to agreements without their consent, with some allegations that signatures were forged. The FCA is examining the full customer journey, including exit fees and how customers were contacted.

Also note

A separate consultation paper, CP26/23, published in July 2026, proposes targeted changes to the Consumer Duty's scope, including narrowing its territorial reach so it does not apply to business conducted wholly for customers outside the UK. That is a separate process and does not affect the enforcement activity described here. Firms with cross-border business should monitor CP26/23 separately.

Sources

• Enforcement watch 2fca.org.uk
• Consumer duty FCA consults on clarifications to scope and proportionalityhsfkramer.com