Consumer Panel reaction to FSA's waiver on handling of complaints about unauthorised overdraft charges

21 November

The Consumer Panel today called on the FSA to ensure that it continues to monitor closely the working of the current waiver in respect of complaints handling on unauthorised overdraft charges, but believes the waiver will be difficult to justify if the court case initiated by the Office of Fair Trading goes on beyond February 2008.

The Consumer Panel believes the FSA should apply conduct of business regulation to retail banking, and if this had already been done, the issue of bank charges could well have been dealt with much earlier under the FSA's principle of Treating Customers Fairly.

In the FSA's review of the waiver, the Panel was pleased that the FSA recognised the need to pay close attention to people in financial hardship and to make sure they are treated sympathetically and positively in accordance with the Banking Code. However, the Panel also believes that the FSA should do more to publicise the fact that consumers in genuine financial hardship do not have to wait for the outcome of the court case for their case to be considered.

The Panel also calls on the FSA to investigate reports that some consumers have been told by providers that complaints in regard to credit card charges are also covered by the waiver. The FSA and the banks must make clear to consumers that complaints about credit card charges are not included in this waiver, and their complaints will be investigated within the normal timescales.

John Howard, Chairman of the Financial Services Consumer Panel said:

"Although we understand why the FSA has put the waiver in place, it has had the unfortunate effect of delaying consumers' access to justice, whilst allowing the banks to continue taking money from accounts for what may turn out to be illegal charges. The longer this goes on the more unfair it will be, especially on those in financial hardship."

 

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.

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. More information about the Panel's work is available on our website – www.fs-cp.org.uk.

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 twelve members of the Panel as listed below (for further information on individual members, see the Panel's website – www.fs-cp.org.uk)

John Howard (Chairman)
Adam Phillips (Vice Chairman)
Kay Blair
Michael Chapman
Stephen Crampton
Caroline Gardner

Jenny Hamilton
Tony Hetherington
Nick Lord
David Metz
Lindsey Rogerson
Carol Stewart