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Law to help customers sue banks dropped - Times Online
A law allowing consumers collectively to sue banks for mis-selling products has been withdrawn by the Government in the run up to the election.
Measures to encourage “collective redress” have been removed from the Financial Services Bill so that it can be passed by the Lords before Parliament dissolves. Lord Myners, the City Minister, says this is a pragmatic move to get the rest of the Bill through in the last days of the current government.
Plans for compulsary finance education in schools and proposals for a Council for Financial Stability (CFS), which would bring together the Bank of England, Treasury and Financial Services Authority, are also being dropped.
The right to “collective redress”, which would give customers the legal right to form class-action lawsuits against financial institutions, was welcomed by consumer groups as a way of gaining compensation for those who have been mis-sold products such as Payment Protection Insurance or mortgage endowments.
Which?, the consumer watchdog, said that the problem of mis-selling has been compounded by a slow response from the financial services industry and regulators and that more consumers are finding they need to progress their complaint all the way to the Financial Ombudsman in order to be guaranteed a fair hearing.
Peter Vicary-Smith, Chief Executive of Which? says: “Collective redress is a potentially powerful weapon for consumers against the systemic mis-selling of financial products and would prove a real deterrent for firms engaging in unscrupulous sales practices.
"By dropping these measures from the Financial Services Bill, a golden opportunity to empower consumers is being missed. We call on Parliament to reintroduce collective redress at the earliest opportunity."
The proposal for compulsory financial education in schools had been included in the Children, Schools and Families Bill, which would have made financial education a compulsory part of personal, social, health and economic education (PSHE) in schools.
However. the Conservative Party's opposition to making sex education compulsory for at least one year, with no parental opt-out, has forced the government to drop the PSHE element of the Bill altogether.
A law allowing consumers collectively to sue banks for mis-selling products has been withdrawn by the Government in the run up to the election.
Measures to encourage “collective redress” have been removed from the Financial Services Bill so that it can be passed by the Lords before Parliament dissolves. Lord Myners, the City Minister, says this is a pragmatic move to get the rest of the Bill through in the last days of the current government.
Plans for compulsary finance education in schools and proposals for a Council for Financial Stability (CFS), which would bring together the Bank of England, Treasury and Financial Services Authority, are also being dropped.
The right to “collective redress”, which would give customers the legal right to form class-action lawsuits against financial institutions, was welcomed by consumer groups as a way of gaining compensation for those who have been mis-sold products such as Payment Protection Insurance or mortgage endowments.
Which?, the consumer watchdog, said that the problem of mis-selling has been compounded by a slow response from the financial services industry and regulators and that more consumers are finding they need to progress their complaint all the way to the Financial Ombudsman in order to be guaranteed a fair hearing.
Peter Vicary-Smith, Chief Executive of Which? says: “Collective redress is a potentially powerful weapon for consumers against the systemic mis-selling of financial products and would prove a real deterrent for firms engaging in unscrupulous sales practices.
"By dropping these measures from the Financial Services Bill, a golden opportunity to empower consumers is being missed. We call on Parliament to reintroduce collective redress at the earliest opportunity."
The proposal for compulsory financial education in schools had been included in the Children, Schools and Families Bill, which would have made financial education a compulsory part of personal, social, health and economic education (PSHE) in schools.
However. the Conservative Party's opposition to making sex education compulsory for at least one year, with no parental opt-out, has forced the government to drop the PSHE element of the Bill altogether.
