Consumer Duty: test whether customers understand your communications

Many companies invest time and money in making their customer documents clearer. They may simplify the wording, reorganise the information and ask colleagues to review the result. These changes can be valuable, but the team still needs evidence that the explanation works for its intended readers. That is where testing with customers becomes important, particularly for financial firms working under Consumer Duty.

The central question is whether customers understand the information well enough to use it in the decision they face. Asking whether they like a letter or feel confident after reading it gives different evidence. A useful study needs to investigate what they can actually explain and do. From there, the firm can identify what needs to change and check whether the revised version addresses the difficulty.

What Consumer Duty expects of communications

The consumer understanding outcome is set out in PRIN 2A.5. It requires communications to meet retail customers' information needs and be likely to be understood. They must also equip customers to make effective, timely and properly informed decisions. The outcome applies across the customer relationship, beyond the point of sale. Testing and monitoring are part of supporting that outcome. Firms need a proportionate approach, taking account of the communication and the consequences of misunderstanding. This does not mean testing every document through an identical research programme. The reasons for selecting communications and methods need to be clear.

Test understanding through practical tasks

A person’s confidence in their understanding does not always match what they have understood. That distinction matters when deciding what to ask in a research session. A customer may feel confident after reading a letter and misunderstand an important condition. Another may understand correctly but feel uncertain. Ask people to find information, explain it in their own words and use it in a realistic situation. Observe how they reach the answer. For a renewal letter, useful tasks might include:

• Find the new premium and explain when it takes effect.
• Explain what happens if you take no action.
• Find how to change or cancel the cover.
• Identify a relevant exclusion and explain what it means in a particular situation.

These are illustrative tasks. Agree the correct answers with the responsible teams before testing. Avoid questions that disclose the answer. 'Did you notice that cancellation costs £50?' tells the participant what the test should establish. Instead, ask what cancelling would involve in a defined situation. Record the explanation and any help the participant needed.

Choose participants who reflect the intended audience

Colleagues outside the project can identify obvious problems in an early draft. Their feedback cannot establish how customers will understand the finished communication. Staff may know the product, terminology and internal processes. Customers bring different knowledge and circumstances. Recruit people who reflect the relevant audience. Include differences in product experience, language needs and the circumstances in which the information will be used. Plan for accessibility and customers with characteristics of vulnerability. Participation may require adjustments to the session, format or support available. Avoid treating one participant as representative of everyone with a particular need. Explain the sample's limits when reporting the findings.

Make the research proportionate

Start with the possible consequences of misunderstanding. A missed cancellation deadline or misunderstood exclusion may deserve attention before a low-risk administrative message. Also consider how many people receive the communication, their information needs and the complexity of the decision. A small qualitative study can reveal problems and explain how they arise. It cannot estimate understanding across an entire customer population. If you need a comprehension rate or a reliable comparison between groups, use an appropriate quantitative design. Match the method to the question. An initial review can help focus the research. Examine the communication's completeness, structure and wording before spending time testing avoidable problems.

Readability scores give a limited view

Readability formulas generally use features such as sentence length and word length. They do not establish whether customers understand the product or its consequences. A short sentence can omit a necessary condition. Familiar words can describe a process that customers cannot complete. Review whether the content includes what readers need and places it where they can find it. Consider the design and the surrounding journey. The four principles in ISO 24495 provide a useful framework for this review. They do not replace testing with intended readers.

Use findings to improve the communication

Record the version tested and what participants were asked to do. Distinguish independent answers from answers reached after prompting. Explain which difficulties need changes to wording or structure. Escalate findings that point to product design, service processes or missing support. Agree who will act on each finding. Test the revised communication where appropriate and check whether the identified difficulty has been addressed. In its March 2026 review, the FCA highlights testing before and after changes. It also identifies weak documentation and limited follow-up as areas for improvement. The examples in that review help firms assess their approach. They do not create additional regulatory requirements.

Continue monitoring after publication

Research takes place in a particular setting. Live customer interactions may reveal problems that the study did not identify. Review relevant calls, complaints and requests for explanation. Consider where people abandon a process or miss an action they needed to take. These signals need interpretation. A completed purchase or the absence of complaints cannot, on its own, establish understanding. Use the evidence to identify further questions and improvements. Keep a record of what changed and what you learned from checking it.

Sources and further reading

Simplified. To reap the rewards of clear communication, you must test your documents with customers. 7 November 2019.

FCA Handbook: PRIN 2A.5, Consumer understanding

FCA: Consumer understanding, good practice and areas for improvement, 13 March 2026

Discuss a plain language review or customer research.