The Lords just opened an inquiry into Consumer Duty. The answer is in the FCA's own data.

On Friday 22nd May 2026, the House of Lords Financial Services Regulation Committee opened a formal inquiry into how the UK's home and travel insurance market is regulated. Eight questions. Written evidence due by 5pm on Friday 26th June 2026. Chaired by Baroness Noakes.

The fourth question is the one that matters. It asks how effective the FCA's enforcement powers and the Financial Ombudsman Service's dispute resolution function actually are.

The Lords have been polite about it. Phrased the question as a question.

The rest of the week's news already wrote the answer.

What happened around the same week

Tuesday 19th May. Coverage confirmed the FCA's motor finance redress scheme, PS26/3, is now expected to slip into November pending the legal challenge filed on 1st May. The FCA published a separate statement on 8th May saying it would defend the scheme as lawful. The scheme is designed to put around £7.5 billion back in the hands of motor finance customers whom the FCA itself has assessed as treated unfairly across roughly 14 million loans.

Friday 16th May. Foreign Policy Journal published analysis showing FCA financial-crime fines have fallen by 78 per cent over five years. The FCA penalty regime is undergoing a formal overhaul partly because, on the regime's own metrics, it has been quietly winding down.

Earlier in the month. Ofgem's planned £500m energy debt write-off, designed to help around 195,000 households in receipt of means-tested benefits, was paused indefinitely under instruction from HM Treasury. The scheme had already been consulted on. The ICO's penalty notice against South Staffordshire Water for the 2022 Cl0p breach, which affected 633,887 people, settled at £963,900 after a voluntary 40 per cent reduction.

Today, Saturday 23rd May. This is being written on the eighth day before the FCA lifts its motor finance complaints handling pause, scheduled for 31st May. The pause was originally meant to run to 31st July. Lifting it early is presented as good news. In practice it means an immediate inflow of complaints onto a complaint-handling estate that has been broadly stationary since the original Court of Appeal judgment in late 2024.

What the Lords will find when they look

The committee has asked, among other things, whether Consumer Duty has worked in the consumer insurance market.

There are two ways to answer that.

The first is the way the FCA will answer. Cite the regulations introduced under PS22/9. Point to the firm-level supervisory work. Quote the Consumer Duty Board Champion reports. Say the regime is "embedding".

The second is the way the data answers. FOS uphold rates have been broadly stable across insurance categories at around 35 to 40 per cent depending on product. Travel insurance complaints are at their highest level since the pandemic, per the FOS's own news page. Honour rates by individual companies after FOS decisions vary wildly and are not published. Public FCA enforcement actions against insurers since Consumer Duty went live can be counted on one hand.

The Lords have the second set of numbers. The inquiry exists because the polite answer is not credible.

What this means for a case in flight today

The temptation, watching a regulator pull back, is to assume the case is harder to win.

It is not. The ombudsman process still works. Companies still pay when ordered to. The Consumer Rights Act 2015, sections 9 to 24, still gives consumers the same statutory remedies. What changes is what the consumer should expect from the early-stage process.

A regulator focused on enforcement creates a disciplining effect on customer service. Complaints handlers under that pressure resolve cases at first contact, partly because they know the regulator is watching. A regulator that is not actively enforcing creates the opposite. Complaints handlers triage on the assumption that most consumers will not escalate, which is correct: industry data is consistent that only a small minority of dissatisfied consumers ever reach the ombudsman, and the rest give up.

The reply to that is to be the consumer who escalates. Cite the section. Quantify the loss. Send the deadlock letter. Refer to the ombudsman the day you are entitled to. The system delivers when it is forced to.

Also worth your time this week

A short reading list of the other moves that mattered, source link below each.

• FSA: Shama Falooda Almond drink recalled over undeclared milk. Sunrise International Foods Ltd recalled the 290ml drink, all batch and date codes, on 22nd May. A milk-allergy health risk for anyone with the allergy or intolerance. FSA-AA-27-2026.
• FSA: Divilly Brothers crumbed ham recalled over undeclared wheat. Divilly's recalled its No Added Nitrite Crumbed Ham on 21st May. A gluten-allergy health risk. FSA-AA-26-2026.
• Motor finance pause lifts in eight days. The FCA confirmed earlier in May that its pause on the handling of motor finance complaints lifts on 31st May 2026, earlier than the originally consulted 31st July. Affected consumers should be ready to chase their lender from 1st June. FCA statement.
• PS26/3 motor finance redress scheme expected to slip to November. The FCA's compensation scheme faces a legal challenge filed on 1st May; coverage now puts implementation in mid-to-late 2026 pending the tribunal decision. The FCA will defend the scheme as lawful. FCA statement on the challenge.
• FCA penalty regime faces overhaul. Foreign Policy Journal reported on 16th May that FCA financial-crime fines have fallen by 78 per cent over five years, prompting a regime review. Foreign Policy Journal analysis.
• British Gas £70m prepayment-meter settlement. British Gas agreed up to £70m in debt write-offs and compensation for customers force-fitted with prepayment meters between 2018 and 2021, plus £20m into Ofgem's voluntary redress fund. MSE coverage.
• ICO fines South Staffordshire Water £963,900. The ICO published its penalty notice over the 2022 Cl0p ransomware breach, which exposed personal data of 633,887 customers. A 40 per cent voluntary reduction applied. ICO press release.
• From 19th June, all UK data controllers must run a formal data-protection complaints process. ICO guidance kicks in next month. Worth checking your insurer, energy supplier and bank publish a route by then. ICO consultation outcome.
• MSE and Which? jointly write to the PM on scam adverts. A 19th May open letter calling for stronger action on scam advertising, picking up Martin Lewis's long-running campaign and Which?'s scam-tracker data. MSE coverage.

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