The regulator has published a discussion paper titled Smarter Consumer Communications, which highlights its key concerns in order to kick-start a debate to encourage firms and consumer groups to deliver information to consumers in a smarter way.

One of the concerns was that financial services consumers may not be able to identify how costs described as ‘fees’ or ‘charges’ differ from each other, as well as finding it difficult to compare total costs.

"All too often customer communications are so technical that even the most astute consumer would struggle to understand the information,” Christopher Woolard, Director of Strategy and Competition at the FCA stated.

"Communications play a fundamental role in helping consumers make decisions about the products and services they buy which is why it’s so important that we work with firms to get this right."

The watchdog reported that market research indicated that requiring firms to disclose information about prices at the point of sale would help inattentive consumers.

Research from Which? also highlighted that the significant amount of additional fees a consumer can incur makes it difficult for them to compare products.

“Of course, simply disclosing cost information does not necessarily empower consumers to make effective decisions,” the FCA noted.

“This information should be presented clearly, disclosed at an appropriate time and provided through a suitable medium.”

On top of this, the paper welcomed suggestions concerning further issues such as the presentation of terms and conditions, helping consumers direct queries to the relevant part of a firm quickly and easily, and raising awareness of the FOS.

Some examples of smarter communications suggested by the regulator included using plain language, short format, bullet points and clear graphics and the use of interactive apps to help consumers understand and manage their product.

The FCA is seeking feedback on the discussion paper by the 25^th September later this year.