Regulatory reform must empower consumers
While welcoming todayâ€™s publication of complaints data by the FSA, the Financial Services Consumer Panel is calling for even more meaningful information to be made available. It argues consumers would benefit from more detailed information, set in context, which would allow them to compare firm performance and make more informed choices.
Better information would also, it believes, be an important catalyst, driving improved firm behaviour. The Panel is advocating that the reforms to financial services regulation need to include new powers for the Financial Conduct Authority to publish performance information on firms. This would create a powerful tool to deliver a better service to consumers and encourage more effective competition.
Adam Phillips, Chair of the Consumer Panel commented:
â€œConsumers have a right to know about poor firm performance, such as the nature of complaints and a firmâ€™s record in handling complaints. The FSAâ€™s successor bodies should therefore be able to publish information about firms, so that consumers can choose providers which will treat them fairly.
The Consumer Panel wants to see the current restrictions in the Financial Services and Markets Act on publishing information collected during the FSAâ€™s regulatory work scrapped. We also want the regulator to have the power to publish Warning Notices issued to firms who are accused of breaking the Rules, without having to ask the firmsâ€™ permission.
It is not surprising that consumersâ€™ satisfaction with the financial services industry is so low when the industry uses the risk of a loss of confidence in firms to withhold information that would be regarded as essential in other sectors. The balance of power needs to change.'
Notes to editors
- Currently sections 348 and 349 of Financial Services and Markets Act 2000 prevent the disclosure of information collected during the discharge of the FSAâ€™s regulatory functions.
- The Consumer Panelâ€™s submission on regulatory reform can be found on our website.
- The Panel has previously published research on how transparency can be used as a regulatory tool.
- 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 is available on our website.