Consumer Panel calls for straightforward financial products ahead of Government consultation

The Financial Services Consumer Panel has called for more straightforward financial products ahead of the Government’s anticipated review of financial services regulation.

The demand follows a round table¹ on the Consumer Panel’s fairness research² which revealed a consumer perception that financial services compared poorly to the retail sector. Consumers considered financial services less fair, insufficiently competitive and less accessible.

The research found complex products, which include some insurance products, or those with disproportionate charges, such as store cards, particularly unfair. Participants at the round table also highlighted concern over the way banks hide behind phones and documents instead of offering face to face contact, and penalise loyalty in contrast to other sectors.

Kay Blair, Consumer Panel Vice Chair commented:

“We organised the round table to debate the outcomes of our research with an expert audience as we are very concerned by some of the findings. In particular it is worrying that consumers perceive financial services as getting less fair. There is a need for more straightforward financial products to allow consumers to exercise choice.

Consumers rightly regard financial services as an essential part of life. The industry needs to do more to increase transparency, giving customers clear and meaningful information, so that they see an improvement in standards of customer service and greater ability to compare products.

We look forward to the Government’s expected consultation on financial services regulation where we will be pushing for measures which will make financial services fairer. We have already set out some of our ideas in our ten point plan detailing how we believe financial services could be improved.”

1. The round table attendees included academics, industry, regulatory and consumer representatives and was held at the offices of Opinion Leader Research on Thursday 22 July 2010 under Chatham House rules

2. The FSA research was undertaken by Opinion Leader Research. Download the full report[1]

3. The Consumer Panel ten point plan[2]

4. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA Board on the interests and concerns of consumers and reports on the FSA’s performance in meeting its objectives.

5. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit.

6. There are currently thirteen members of the Panel as listed below (for further information on individual members, see Who is on the panel)[3]