11 June 2012
The Financial Services Consumer Panel has called on members of the House of Lords to show leadership on consumer rights by ensuring consumers get a fair deal from regulatory reform.
The Lords is set to debate the second reading of the Financial Services Bill today. The Consumer Panel is calling for the Bill to be amended to enhance consumer protection through:
- a duty of care for those providing financial services;
- a requirement for the Prudential Regulation Authority (PRA) to take into account the views of consumers by responding to representations from the Consumer Panel;
- a requirement of access for all consumers to financial services;
- an increase in the transparency of financial services regulation by empowering the PRA and Financial Conduct Authority (FCA) to disclose information about the financial services firms they regulate;
- effective competition powers for the FCA to allow it to deliver its statutory objectives; and
- a requirement for the regulators to undertake full and robust cost benefit analysis when developing new rules.
Adam Phillips, Consumer Panel Chair commented:
“This legislation represents a once in a lifetime opportunity to make the UK regulatory system more accountable and transparent. As they have previously demonstrated with financial services legislation, Members of the Lords have the chance to make a real difference for consumers. Firms should be required to act honestly, fairly and professionally towards their customers and the PRA should be more accountable to consumers when making decisions on with-profits policies or mortgages.
The Bill is silent presently on access to financial services; a pressing issue for many in rural areas where bank branches are closing and access to free cash points is diminishing. Increasing restrictions on eligibility for motor and flood insurance are also impacting on consumers across the country.
The new FCA must be given effective competition powers concurrent with those of the Office of Fair Trading (OFT) to ensure market distortions can be resolved with no delay. The cost benefit analysis provisions need to be strengthened to ensure regulators comprehensively assess the impact of their proposals.”
Notes to editors
- The Consumer Panel briefing paper[1].
- 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 on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
- 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. More information about the Panel's work[2].