Consumers to be at heart of financial reforms

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Speaking at a financial services conference arranged by consumer group Which?, the financial secretary Mark Hoban MP confirmed the government's commitment to ensure the Financial Conduct Authority (FCA) will be tougher in securing protection for consumers than its predecessor.

Hoban told the audience of industry and consumer group representatives: "Let's be clear, the FCA will be less prepared to see detriment occur, and more willing to step in and prevent it from happening, than has been the case to date."

In addition to clarifying the commitment of the FCA to consumers, Mr Hoban also announced proposals to give consumer groups new powers to deal with toxic financial products. The proposals will see consumer groups granted 'super-complaint' powers to report toxic financial products.

Mark Hoban said: "We want to go further by giving frontline consumer groups like Which? the power to hold the regulator to account where there has been widespread mis-selling of financial services products. Which? and other consumer groups should be able to ask the regulator to deal with widespread mis-selling promptly, giving greater clarity and certainty to consumers."

Under the new powers, consumer groups would be able to flag products that they believe are harmful to consumers, and the new Financial Conduct Authority (FCA) would be obliged to investigate within a set time scale.

Which? chief executive Peter Vicary-Smith welcomed the proposals. "The powers for consumer groups to raise particular issues directly with the regulator and to insist on prompt consideration of them will mean that problems with products can be tackled earlier and people will finally get the speedy and fair redress they deserve."

The conference also featured discussion panels on regulation and competition and saw panellists Jeff Prestridge (Mail on Sunday), Eric Leenders (BBA), Chris Leslie MP, Margaret Cole (FSA), Joe Garner (HSBC) and Clare Spottiswoode of the Independent Commission on Banking engaging in a lively debate on the proposed reforms.

Closing the conference, Peter Vicary-Smith welcomed the new proposals and set out his belief that a new consumer-focused regulator was long overdue. However, with a long way to go until the proposals became reality, he warned that “the devil will be in the detail”.

Which? is committed to working with key stakeholders during the formation of the new bodies and wants to see key consumer protection measures kept in place as the proposals progress through Parliament.

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