Tweet
Regulators to join forces to protect consumers
By Lucy Warwick-Ching
Published: March 11 2010 15:21 | Last updated: March 11 2010 15:21 The Financial Times Limited
The Financial Services Authority, the Office of Fair Trading and the Financial Ombudsman Service have proposed the creation of a consumer protection committee to identify consumer risks before the risks turn into widespread problems.
The committee would also work to determine fast and effective ways of dealing with these risks, whether through regulatory action or consumer complaints.
The FSA on Thursday published a discussion paper, Consumer Complaints (Emerging Risks and and Mass Claims), that sets out the work the newly created committee would undertake.
It said the committee would draw together specialists from the three regulatory bodies to spot emerging risks, with the aim of increasing the regulators’ and FOS’ ability to respond decisively to any threats in the market.
The FSA said the committee would sit alongside its intensive supervision regime in which firms’ business models, product designs and marketing material are scrutinised to see if it poses a risk to consumers or the industry.
Sheila Nicoll, director of conduct policy at the FSA, says: “Complaints handling is a priority area within the FSA’s intensive supervision agenda.
“The co-ordination committee is a clear indication of the intention and will of the authorities to work even more closely together to improve the experience of consumers and to avoid problems happening in the first place.”
Ray Watson, director of consumer credit at the OFT, said: “Identifying and dealing with problems at an early stage is important for ensuring consumers do not suffer unnecessary harm from financial products. “We believe that the proposals for a co-ordination committee and the focus on risk will improve our ability to deal with problems before they become widespread.”
However, lawyers said the decision to set up a consumer committee was in reaction to the Conservatives’ statement last month that consumer
protection is too fragmented..
”It presumably is no co-incidence that FSA’s proposed new consumer protection committee has such strong echoes of the Tories’ plans under its own Consumer Protection Agency”, says Ash Saluja of law firm CMS Cameron McKenna.
”Financial product design is now clearly fair game for the regulator. Although it is still unclear how intrusive the regulator will really be, we are still a long way from product pre-authorisation. But can we be sure that the judgement of the regulator is better than that of product providers”?
The Conservative party said in February that it would set a maximum five-year deadline for completing their proposed radical shake-up of financial regulation, including the creation of a consumer protection agency – despite City concerns about the potential costs and disruption.
By Lucy Warwick-Ching
Published: March 11 2010 15:21 | Last updated: March 11 2010 15:21 The Financial Times Limited
The Financial Services Authority, the Office of Fair Trading and the Financial Ombudsman Service have proposed the creation of a consumer protection committee to identify consumer risks before the risks turn into widespread problems.
The committee would also work to determine fast and effective ways of dealing with these risks, whether through regulatory action or consumer complaints.
The FSA on Thursday published a discussion paper, Consumer Complaints (Emerging Risks and and Mass Claims), that sets out the work the newly created committee would undertake.
It said the committee would draw together specialists from the three regulatory bodies to spot emerging risks, with the aim of increasing the regulators’ and FOS’ ability to respond decisively to any threats in the market.
The FSA said the committee would sit alongside its intensive supervision regime in which firms’ business models, product designs and marketing material are scrutinised to see if it poses a risk to consumers or the industry.
Sheila Nicoll, director of conduct policy at the FSA, says: “Complaints handling is a priority area within the FSA’s intensive supervision agenda.
“The co-ordination committee is a clear indication of the intention and will of the authorities to work even more closely together to improve the experience of consumers and to avoid problems happening in the first place.”
Ray Watson, director of consumer credit at the OFT, said: “Identifying and dealing with problems at an early stage is important for ensuring consumers do not suffer unnecessary harm from financial products. “We believe that the proposals for a co-ordination committee and the focus on risk will improve our ability to deal with problems before they become widespread.”
However, lawyers said the decision to set up a consumer committee was in reaction to the Conservatives’ statement last month that consumer
protection is too fragmented..
”It presumably is no co-incidence that FSA’s proposed new consumer protection committee has such strong echoes of the Tories’ plans under its own Consumer Protection Agency”, says Ash Saluja of law firm CMS Cameron McKenna.
”Financial product design is now clearly fair game for the regulator. Although it is still unclear how intrusive the regulator will really be, we are still a long way from product pre-authorisation. But can we be sure that the judgement of the regulator is better than that of product providers”?
The Conservative party said in February that it would set a maximum five-year deadline for completing their proposed radical shake-up of financial regulation, including the creation of a consumer protection agency – despite City concerns about the potential costs and disruption.
Comment