New joint committee to enhance consumer protection
The committee would identify any risks with the potential to turn into widespread problems, and determine fast and effective ways of dealing with them, whether through regulatory action or consumer complaints.
The work of the committee would update the wider implications process, which is often triggered once a problem has already had an impact on both the industry and consumers.
The new committee would draw together specialists from the three bodies to spot emerging risks, increasing the ability of the regulators and ombudsman service to respond quickly and decisively to the threats in the market.
The focus on emerging risks also complements the FSA’s ongoing intensive supervision regime, where firms’ business models are scrutinised along with their product design and marketing material to assess whether any single aspect, or indeed the entire operation, poses unacceptable risks to customers or the wider industry.
Sheila Nicoll, FSA director of conduct policy said: “Complaints handling is a priority area within the FSA’s intensive supervision agenda. The co-ordination committee is a clear indication of the intention, and will, of the authorities to work even more closely together to improve the experience of consumers, and to avoid problems happening in the first place.”
Ray Watson, OFT director of consumer credit, said: “Identifying and dealing with problems at an early stage is important for ensuring consumers do not suffer unnecessary harm from financial products. We believe that the proposals for a new co-ordination committee and the focus on risk will improve our ability to deal with problems before they become widespread.”
David Thomas, interim chief ombudsman: “The ombudsman service is committed to preventing complaints, as well as resolving them. It’s key for regulators and the ombudsman service to continue working closely together to identify potential problems as soon as they emerge, to ensure that consumers are treated fairly and can have confidence in financial services.”