The Financial Services Consumer Panel has made six recommendations it views as essential if the Financial Conduct Authority (FCA) is to deliver more effective protection for consumers than the FSA it is to replace.
The recommendations are:
Act more swiftly to prevent widespread consumer detriment
Make effective use of consumer and market intelligence
Utilise the full suite of its powers
Ensure risks are prioritised and resources used effectively
Deliver a credible deterrence
Create and embed a culture in the FCA which will deliver its regulatory vision
The panel has based the priorities following its review of the FSA’s conduct regulation regime. The review concentrated on three areas of FSA activity: PPI replacement products, packaged bank accounts and the impact of incentives or reward strategy. It found that the FSA had often acted too slowly to stop consumer harm despite significant concerns being raised.
“We hope that these recommendations will assist the FCA in developing a conduct regulation regime which is more effective in protecting consumers,” said Adam Phillips (pictured), Consumer Panel chairman. “We have seen so many financial scandals in recent years where the FSA has been on the back foot.
“It cannot be right that considerable consumer detriment has built up before the FSA is able or willing to act. The FCA has to be smarter in using available intelligence, faster in analysing problems and bolder in its actions.”
Phillips added: “The FCA has the potential to deliver a revolution in consumer protection. However, this potential will only be realised if it can learn the lessons from the FSA’s experience of conduct regulation.”