© Reuters. FILE PHOTO: The logo of the new Financial Conduct Authority is seen at the agency’s headquarters in the Canary Wharf business district of London

By Huw Jones

LONDON (Reuters) – Britain’s financial regulator said on Thursday it will rethink how consumers should be protected after a surge in online scams since people were forced to work from home due to COVID-19 restrictions.

Under its new CEO Nikhil Rathi, the Financial Conduct Authority is under intense pressure from lawmakers make radical changes so it can spot misconduct faster.

The watchdog was heavily criticised last year in an independent report into the collapse of investment firm London Capital & Finance. It has already made several new executive appointments and pledged to improve how it deals with information received from the public.

“In order to transform the Financial Conduct Authority to be as effective as it can be in this new world, we need to do many things differently,” the watchdog’s chair Charles Randell said in a speech.

Transforming the FCA will require it to “reset” its approach to the principles it applies, in particular the longstanding principle that the companies it regulates must treat their customers fairly.

“We have been giving consideration to a new consumer duty, or duty of care, and we will make further announcements about this shortly,” Randell said.

Duty of care is a much tougher requirement in terms of consumer protection as it is usually embedded directly into law.

In 2019, the FCA effectively ruled out the creation of a far tougher statutory duty of care on regulated firms to buttress legal consumer protections, but instead considered revising its existing principles.

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“We also need to use the additional speed and scope to adjust our rules which we have, now that the UK has left the European Union, Randell said.

This week the FCA delayed publication of its new business plan until the summer as work on the overhaul plans continue.

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