Retail Banking × Compliance — United Kingdom · published 2026-05-26 · methodology v2.1

Legal basis for 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 for 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: AI assistants correctly identify that the Consumer Duty was created by FCA rulemaking under FSMA 2000 rather than by Act of Parliament, and they accurately reference FCA 2022/31 as the relevant instrument. However, the AI response does not address the role of FSMA 2023 at all — it omits the specific clarification that FSMA 2023 did not create the Consumer Duty, which is a targeted and material point the FCA itself has made explicit.
What the regulator actually says: The FCA has stated directly: "FSMA 2023 did not create the Consumer Duty." The Duty derives from the FCA's statutory rule-making power under FSMA 2000, exercised through the 2022 instrument amending PRIN.
Why the AI went wrong: The AI produced a technically accurate but incomplete answer and failed to address a specific factual question that was put to it. By not engaging with the FSMA 2023 question, it left the reader with no correction of a plausible misconception that has circulated in industry commentary.
Cited source(s):
https://www.akingump.com/en/insights/alerts/new-fca-principle-12-consumer-duty — Pretextual

Impact for this audience

A Compliance team that relies on the AI's incomplete answer on the legal basis of the Consumer Duty may produce internal policy or board briefing material that fails to address the specific FSMA 2023 misconception — leaving senior management or legal counsel with an inaccurate understanding of the Duty's legislative provenance. If this error surfaces in a regulatory dialogue with the FCA, it signals a lack of foundational competence in the firm's Compliance function. The FCA has broad powers under FSMA 2000 to take action where it finds firms operating without adequate understanding of their regulatory obligations, and a documented misstatement in board-level materials could become material in a supervisory assessment.

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. Harm prevention under the Consumer Duty — the customer-acceptance defence

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 for the Consumer Duty and the role of FSMA 2023 — Retail Banking × Compliance — United Kingdom." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q002. RegLegBrief AI Hallucination Research, published 2026-05-26. https://reglegbrief.com/audiences/sectors/gb/retail_banking/compliance/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

APA 7th edition

RegLeg Specialist Panel. (2026). Legal basis for 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/sectors/gb/retail_banking/compliance/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/

Bluebook / OSCOLA (US + UK legal)

RegLeg Specialist Panel, Legal basis for 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/sectors/gb/retail_banking/compliance/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 for 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/sectors/gb/retail_banking/compliance/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-002/}
}

← Back to case study summary Case study detail →

About Citation IDs →