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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NOTES TO EDITORS:

1. The full text of Callum McCarthy's speech on 9th February is available from the FSA - www. fsa.gov.uk..
   
   
2. 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.



3. 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



4. 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.



5. There are currently eleven members of the Panel as listed below (for further information on individual members, see the Panel's website).

John Howard (Chairman)
Adam Phillips (Vice Chairman)
Caroline Gardner
Harriet Hall
Tony Hetherington
Stephen Locke
Nick Lord
David Metz
Paul Salvidge
Robert Skinner
Carol Stewart