What we have done for consumers

Our role is to represent the interests of consumers in the development of policy for the regulation of financial services.  Since the Panel’s primary role is to advise on the development of regulation, it is inevitable that its contribution to better regulation for consumers will frequently be hard to spot in the policies and regulations which are eventually published.

As an indication of our work in the past, here are some examples of areas where the Panel has taken a strong line in the debate:

• Treating Customers Fairly - We believe that treating customers fairly should be central to anything the financial services industry does. All firms should understand the importance of following the regulatory principle of treating customers fairly (TCF). Indeed, firms that treat their customers fairly will encourage those customers to engage more with the industry. This can only be good for firms in the long term.

  However, the FSA's thematic work continued to find poor behaviour in firms in 2009. We pressed the FSA to ensure that the supervisory process looked for effective outcomes.

• Banking regulation - the Panel's strong lobbying encouraged the FSA to issue its consultation suggesting that the FSA took over regulation of retail banking from the Banking Code. We published a position paper on Retail Banking in 2010.

• Financial Capacity - The Consumer Panel had long argued for an impartial financial advice service which is not linked to the sale of any financial products. In 2008 we therefore supported the Government's Thoresen Review. The review led to the FSA being charged with the development of a money guidance service. This led to the creation of CFEB the Consumer Financial Education Body.

• Responding to the financial crisis in 2007-2008 – The Panel actively lobbied to achieve the greater compensation offered during the crisis for retail bank deposit holders should their bank collapse,   Our ideal is 100% compensation, but we also continue to lobby for at least different brands to be covered by separate compensation:  often consumers do not understand that very different sounding brands can be authorised under the same institution and so only qualify for one compensation limit.

• Payment by commission and the FSA’s retail distribution review – The FSA agreed to act on the effects of commission bias in the advice arena after pressure from the Panel.  Our consistent highlighting of weaknesses in the retail advice sector continues to influence the developing Retail Distribution Review.  This is work in progress and we are challenging the FSA to help ensure the consumer viewpoint is acknowledged effectively and more detail under What we are doing for consumers.

• With profits – Research published by the Panel highlighted significant problems in the governance arrangements in with profits funds.  The FSA has taken action on some of the issues, although more remains to be done.

• FSA communications with consumers – The Panel has pressed the FSA over many years to do more to help consumers by giving out clear and unbiased generic information, influencing the development of the FSA’s money-made-clear website and consumer information. 

• Mortgage Arrears/repossessions – Since the FSA took over the regulation of mortgages in 2004 the Panel has continued to encourage for improvements in this vital area for consumers.  Most recently we have pressed the FSA to ensure that mortgage companies comply with FSA requirements to liaise properly with customers to do all possible to avoid arrears and repossessions.  At the same time we promoted this idea within the Court system, which eventually resulted in the mortgage arrears pre-action protocol from the Ministry of Justice.

• Enforcement - The FSA's increase in the number and profile of enforcement action from 2008/9 onwards was a response in part to pressure from the Consumer Panel. The Panel has always maintained that strong action against firms and individuals is important, not only for better behaviour in the industry, but also for consumers to gain confidence from an industry which is well policed.