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Practitioners — Accountants (CA/PA) · updated 2026-05-28 · methodology v2.1
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Charity and micro-enterprise scope under the Consumer Duty

RLB Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005
What the RLB Specialist Panel found

1. Charity and micro-enterprise scope under the Consumer Duty

  • Question (paraphrased to protect IP): Does the Consumer Duty apply to micro-enterprises and small charities, and on what basis are charities treated as 'retail customers' under PRIN 2A?
  • Source regulation: Consumer Duty (PS22/9 + PRIN 2A), Financial Conduct Authority (Regulator portal: https://www.fca.org.uk)
  • What AI assistants typically say: Multiple AI tools gave similar incorrect responses. One substituted "annual income under £1 million" for the defined threshold of "annual turnover less than £1 million" when describing the charity qualifier. Another omitted the £1 million annual turnover threshold entirely, referring only to "small charities," and framed the definition as applying specifically to deposit-taking, payment services, and e-money activities rather than as the general Handbook definition it is.
  • What the regulator actually says: Under PRIN 2A, 'retail customer' includes consumers (individual persons), micro-enterprises, and charities with annual turnover less than £1 million. This is the general Handbook definition, not one confined to particular activity types.
  • Why the AI went wrong: AI tools appear to have conflated distinct legal concepts — substituting "income" for "turnover" — and to have incorrectly inferred that the definition was activity-specific, likely by associating the language with narrower sector-specific rules encountered in training data. Both errors narrow or shift the threshold in ways that could lead a practitioner to misclassify customers.
  • Cited source(s):
  • https://handbook.fca.org.uk/handbook/PRIN/2A/1.html — Pretextual
  • https://www.fca.org.uk/publication/finalised-guidance/fg22-5.pdf — Pretextual
  • https://handbook.fca.org.uk/handbook/PRIN/2A/5.html — Pretextual
  • https://handbook.fca.org.uk/handbook/prin2a — Pretextual
Impact for Accountants (CA/PA) in United Kingdom advising on the AI Hallucinations Affecting Accountants (CA/PA) in the United Kingdom

An accountant advising a financial services client on Consumer Duty scope who relies on an AI tool's answer to this question may incorrectly classify certain charities as outside the Duty — either by applying an 'annual income' test instead of the correct 'annual turnover' test, or by treating the definition as confined to deposit-taking and payment services rather than applying across the firm's regulated activities. A client who proceeds on that basis and excludes eligible charities from its Consumer Duty programme is non-compliant, and the FCA has been active in reviewing firms' scoping decisions under the Duty.

The accountant who provided the underlying advice without verifying it against the FCA Handbook faces professional exposure if the error is later identified by the regulator or by the client.

References — raw findings (per AI model)
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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.

RLB Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005
Plain text Download 
RegLeg Specialist Panel (2026). "Charity and micro-enterprise scope under the Consumer Duty — Practitioners — Accountants (CA/PA)." Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005. RegLegBrief AI Hallucination Research, published 2026-05-28. https://reglegbrief.com/audiences/practitioners/gb/accountants-ca-pa/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-005/
APA 7th edition Download 
RegLeg Specialist Panel. (2026). Charity and micro-enterprise scope under the Consumer Duty [Hallucination finding RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/audiences/practitioners/gb/accountants-ca-pa/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-005/
Bluebook / OSCOLA (US + UK legal) Download 
RegLeg Specialist Panel, Charity and micro-enterprise scope under the Consumer Duty [RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005], RegLegBrief AI Hallucination Research (May 28, 2026), https://reglegbrief.com/audiences/practitioners/gb/accountants-ca-pa/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-005/.
BibTeX Download 
@misc{reglegbrief_RLB_F_GB_FCA_CONSUMER_DUTY_PS22_9_Q005,
  author    = {RegLeg Specialist Panel},
  title     = {Charity and micro-enterprise scope under the Consumer Duty},
  year      = {2026},
  publisher = {RegLegBrief AI Hallucination Research},
  note      = {Hallucination finding Citation ID: RLB-F-GB-FCA-CONSUMER-DUTY-PS22-9-Q005},
  url       = {https://reglegbrief.com/audiences/practitioners/gb/accountants-ca-pa/finding/GB-FCA-GB-001-CONSUMER-DUTY-PS22-9-v1-005/}
}
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