Mark Hoban, financial secretary to the Treasury, has announced new measures that will allow consumer groups such as Which? to deal with ‘toxic’ financial products such as PPI.
Some consumer groups already have the power to issue ‘super complaints’ to the Office of Fair Trading, and the government is proposing to expand these powers to cover financial products.
Peter Vicary-Smith, chief executive of Which?, welcomed the plans. ‘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.’
Financial super complaints
The measures are designed to tackle the problem of inadequate or slow complaints procedures by making sure that products which cause widespread harm are identified as soon as possible.
Under the new powers, consumer groups would be able to flag products that they believe are harmful to consumers, and the Financial Services Authority (FSA) would be obliged to investigate within a set time scale.
Peter Vicary-Smith said:
‘In the past ten years consumers have suffered from mis-selling and ‘toxic products’ on a grand scale. From mortgage endowments to Payment Protection Insurance, the impact of these rip-offs has been compounded by a slow response from industry and regulators. Excessively long timescales, poor complaints handling and inadequate redress have become all too common.’
Ban toxic financial products
Mark Hoban, financial secretary to the Treasury, said that they had also given new powers to the FSA. This would give them the power to ban toxic financial products that caused real detriment to consumers, such as PPI or mortgage endowment.
‘We want to go further by giving front line 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.’
Which? campaigns on a number of issues that affect consumers, across personal finance, energy, health and technology.
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