Which? says Government promise of a pro-consumer watchdog must be delivered
27 January 2012
As the Government announces the Financial Services Bill, outlining how the industry will be regulated when the FSA is replaced by two new bodies later this year*, Which? chief executive, Peter Vicary-Smith, says:
“Which? is delighted the government has listened to our calls for a tough financial regulator that fights on behalf of consumers. This is why we launched our ‘Watchdog not Lapdog’ campaign**, as people told us they want a regulator that stands up to industry.
“The transferral of consumer credit to the FCA means it can give greater scrutiny to this market and encourage responsible lending, but the government needs to make sure it has these powers as soon as possible. The regulator must be strong, open and proactive, with consumer protection and the promotion of effective competition at the heart of everything it does. The FCA needs to deliver on its promises.”
The consumer champion has launched its Watchdog not Lapdog campaign, calling on the Government to make the FCA a strong ‘watchdog’ and not a weak ‘lapdog’, to stand up to the banks.
Notes to Editor
Which? is calling for a financial regulator that acts as a consumer champion. Pledge support for its ‘Watchdog not Lapdog’ campaign or volunteer a dog to be a face of the campaign at www.which.co.uk/watchdog
* The coalition Government decided in June 2010 to divide the responsibilities of the current regulator, the Financial Services Authority (FSA), into two new bodies. In Autumn 2011, Which? submitted evidence and influenced the drafting of the Financial Services Bill. In December, the committee set up to look at the drafting issued a report of recommendations that echoed some of Which?’s own concerns. The Bill will take up to a year to be finalised, but when ready, will take the current financial regulator, the FSA, and replace it with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). The PRA will focus on the bigger picture issues that have the potential to destabilise the whole economy. The FCA will operate as a consumer champion, and will be tasked with improving competition in the banking sector and stopping dodgy financial products.
** Which? wants the new regulator to learn from the lessons of its predecessor. So Which? is calling on the Government to ensure they create a watchdog, not a lapdog, to stand up to the banks.
Which? wants:
1. An open regulator that tells consumers what it does
We want the FCA to tell consumers when firms are found to have broken the rules, what it is investigating and what it is going to do to stop it.
2. A strong regulator that stands up to the banks and promotes competition
We want the FCA to issue fines that are big enough to act as deterrents and promote competition by making sure products are transparent, simple to compare and easy to switch between.
3. A proactive regulator that acts on issues before they become problems
We want the FCA to take a more proactive approach and ban dodgy financial products and misleading adverts before they cause problems. Lessons must be learnt from the Payment Protection Insurance mis-selling scandal.
