Does the Consumer Duty require firms to prevent all foreseeable harm to retail customers? What is the position where a customer understands and accepts a risk?
The FCA's rule sets a single condition, the firm's reasonable belief that the customer understands and accepts the risk. The model reconstructed a multi-part compliance test (good faith, supported understanding, avoided firm-caused harm, plus general Duty compliance) that does not appear in the regulator's text. This expansion substitutes an inference-derived elaboration for the published rule, removing the qualifier "reasonably believes" and replacing it with a more demanding composite standard.
This finding implicates the model's handling of qualified regulatory rules: the FCA's foreseeable harm provision is a single-condition safe harbour ('reasonably believes'), but the model reconstructed it as a multi-factor compliance test ('good faith', 'supported understanding', 'avoided firm-caused harm', 'otherwise complied with the Duty'). The model dropped the qualifier 'reasonably believes' and inflated the test in the direction of a more demanding standard. The retrieval layer did not correct this; the cited FCA Handbook URL did not anchor the response to the actual rule text.
For a compliance-eval probe, this is a high-priority candidate: pair a rule that turns on a single test with a question that invites a multi-factor answer, and watch whether the model preserves the regulator's structure or reconstructs it.
Payment Institutions risk teams designing customer-onboarding and fraud-warning controls need a clean view of the PRIN 2A.2 safe harbour. The model's multi-condition reconstruction would lead to defensive controls the rule does not require.
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.
RegLeg Specialist Panel (2026). "Finding#1 . Fabricated multi-part safe harbour for foreseeable-harm rule — Payment Institutions × Risk — United Kingdom." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q003. RegLegBrief AI Hallucination Research, published 2026-06-11. https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/sectors/payment_institutions/risk/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-003/
RegLeg Specialist Panel. (2026). Finding#1 . Fabricated multi-part safe harbour for foreseeable-harm rule [Hallucination finding RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q003]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/sectors/payment_institutions/risk/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-003/
RegLeg Specialist Panel, Finding#1 . Fabricated multi-part safe harbour for foreseeable-harm rule [RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q003], RegLegBrief AI Hallucination Research (June 11, 2026), https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/sectors/payment_institutions/risk/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-003/.
@misc{reglegbrief_RLB_F_GB_FCA_CONSUMER_DUTY_PS22_9_Q003,
author = {RegLeg Specialist Panel},
title = {Finding#1 . Fabricated multi-part safe harbour for foreseeable-harm rule},
year = {2026},
publisher = {RegLegBrief AI Hallucination Research},
note = {Hallucination finding Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q003},
url = {https://reglegbrief.com/regulators/j3/gb/fca/consumer-duty-ps22-9/sectors/payment_institutions/risk/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-003/}
}
Every finding on this page compares an AI subject's account of the rule against the regulator's verbatim text from the regulator's own portal. Both are linked. Each delta, its root causes, and impact analysis are documented and published with immutable Citation IDs.