Consumer Panel highlights need for continuing strong regulation by the FSA

12 June

The Consumer Panel's annual report published today, starts with a defence of the current level of regulation from its Chairman, Ann Foster, and a call for the FSA to put up a tougher defence of the need for regulation when it is questioned by the industry.

In her foreword, Chairman Ann Foster says:

"There has been much noise from the industry about the burden of regulation and a plea for a lighter touch. While we are in favour of relevant and effective regulation, we believe it is premature to initiate this debate while many thousands of consumers are still recovering from a time when the industry regulated itself. What matters now is that the existing regulation is properly enforced."

Against this background, the Panel was disappointed that the FSA has already had to write to chief executives of mortgage companies pointing out that firms had not been clear enough in putting together their new 'Key Facts' for consumers.

The foreword says:

"It really is high time that the industry grasped the simple concept of providing clear information to help consumers make effective decisions. The industry cannot expect consumers to take more responsibility for their buying decisions as long as some of its number continue to behave in this unhelpful manner."

The report covers the whole range of issues that the Consumer Panel has debated with the FSA over the past year. It particularly highlights:

• The huge job the FSA has accomplished to incorporate mortgages, general insurance and stakeholder products into regulation;
  

• The need for the FSA to do more in communicating with consumers, and for firms to improve their communication with consumers;
  

• The view that the FSA should have made more progress on how non sales- related generic advice could be given to consumers;
  

• The welcome increase in FSA activity in monitoring financial promotions;
  

• The need to work more closely with the FSA and Treasury to improve consumer representation from all member states in the development of financial services policy in Europe.

The Consumer Panel's role is to monitor and advise the FSA on how to regulate in the best interests of consumers, particularly looking at the FSA statutory objectives of protecting consumers and promoting consumer understanding. The FSA will formally respond to this annual report when the FSA publishes its annual report later in June.

 

Notes to editors

1. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status. The FSA must consider its representations and, if it disagrees with a view expressed or proposal made in the representation, it must give the Panel a statement in writing of its reasons for disagreeing.

2. 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.

3. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.

4. There are currently fourteen members of the Panel as listed below. For further information on individual members, see About the Panel.

   Ann Foster (Chairman)
   Dianne Hayter (Vice Chairman)
   Harriet Hall
   John Howard
   Tony Hetherington
   Stephen Locke
   Nick Lord
   

   Nick Pearson
   Adam Phillips
   Paul Salvidge
   Robert Skinner
   Carol Stewart
   Richard Smethurst
   Dave Watts