Practitioners — Lawyers · published 2026-05-26 · methodology v2.1

Legal basis of the Consumer Duty and the role of FSMA 2023

RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002

What the RLB Specialist Panel found

1. Legal basis of the Consumer Duty and the role of FSMA 2023

Question (paraphrased to protect IP): Was the Consumer Duty created through primary legislation or FCA rulemaking? What is the legal basis for Principle 12 and PRIN 2A, and did FSMA 2023 have any role in creating it?
Source regulation: Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority (Regulator portal: https://www.fca.org.uk)
What AI assistants typically say: The AI correctly identified FCA 2022/31 and the FCA's statutory rule-making power under FSMA 2000 as the legal basis for the Consumer Duty, but gave no answer at all to the question of whether FSMA 2023 played any role. The specific clarification that FSMA 2023 did not create the Consumer Duty — a targeted and answerable part of the question — was entirely absent from the response.
What the regulator actually says: FSMA 2023 did not create the Consumer Duty.
Why the AI went wrong: The AI answered the parts of the question it could handle confidently and silently omitted the negative clarification, leaving an incomplete picture that a reader would not recognise as incomplete. An answer that looks complete but leaves out a specific disclaimer creates the same risk as a wrong answer.
Cited source(s):
https://www.akingump.com/en/insights/alerts/new-fca-principle-12-consumer-duty — Pretextual

Impact for this audience

A UK lawyer advising on whether the Consumer Duty has a foundation in primary legislation — for example, when a client challenges the legal validity of FCA rules or seeks to understand the hierarchy of obligations — may receive an answer that omits the clarification that FSMA 2023 played no role. If that omission is carried into a legal opinion or advice note, the client receives an incomplete analysis of the legislative basis, which could affect how they approach any challenge to or reliance on the FCA's rulemaking power. The FCA has broad enforcement powers under FSMA 2000, and incorrect advice on the source of those powers creates both legal risk for the client and professional indemnity exposure for the advising lawyer.

References — raw findings (per AI model)

RLB-H-GB-FCA-CONSUMER-DUTY-PS22-9-Q002-Sonnet46 Claude Sonnet 4.6 (web search on)

This finding also affects

Next finding → Finding 2. Foreseeable harm and customer-accepted risk under the Consumer Duty

Cite this finding

Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.

Plain text

RegLeg Specialist Panel (2026). "Legal basis of the Consumer Duty and the role of FSMA 2023 — Practitioners — Lawyers." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002. RegLegBrief AI Hallucination Research, published 2026-05-26. https://reglegbrief.com/audiences/practitioners/GB/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

APA 7th edition

RegLeg Specialist Panel. (2026). Legal basis of the Consumer Duty and the role of FSMA 2023 [Hallucination finding RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/audiences/practitioners/GB/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

Bluebook / OSCOLA (US + UK legal)

RegLeg Specialist Panel, Legal basis of the Consumer Duty and the role of FSMA 2023 [RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002], RegLegBrief AI Hallucination Research (May 26, 2026), https://reglegbrief.com/audiences/practitioners/GB/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/.

BibTeX

@misc{reglegbrief_RLB_F_GB_FCA_CONSUMER_DUTY_PS22_9_Q002,
  author    = {RegLeg Specialist Panel},
  title     = {Legal basis of the Consumer Duty and the role of FSMA 2023},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002},
  url       = {https://reglegbrief.com/audiences/practitioners/GB/lawyers/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/}
}

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