The Chairman of the Financial Services Consumer Panel has today welcomed the speech by Chairman of the FSA, Sir Callum McCarthy, which looks at the role of consumers and firms in retail financial markets.

In his speech Callum McCarthy identifies the important issues and the difficulties involved in trying to define the responsibilities of consumers in contracts for financial services and products and recognises that:

"…consumer actions are not prescribed or codified anywhere and so cannot legally be described as "responsibilities"… FOS, like the courts, has to take into account the circumstances of any case, so that an attempt to shift responsibility to the consumer on the simple basis, for example, that he or she had not read the written contract will often prove simplistic …. whether or not the consumer has read a contract will often not be the decisive or determining question in assessing liability."

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

"We are pleased that Callum McCarthy has highlighted the issues here and then provided his own reasoned conclusions. We believe that, in the financial services marketplace, there is huge information asymmetry. The majority of individual consumers are already at a disadvantage in terms of knowledge and resources compared to those selling financial services. In those circumstances, consumers tend to rely on the advice they receive. The more that can be done to help consumers understand the financial products they buy, the more confident they will be in their purchasing decisions."

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