The FSA has issued a feedback statement reaffirming its regulatory approach to balancing the responsibilities of consumers and firms, which it first set out in Discussion Paper 08/05. In it the regulator admits that no consensus of industry opinion has been reached.
The 2008 paper articulated how the FSA considers consumer responsibility in its decision and policymaking. It highlights that the intensity of regulation increases in line with the risks posed to customers by different products. Central to this, the regulator says, is the obligation on firms to treat customers fairly.
The discussion paper also explained the links between this work and other FSA initiatives such as the continuing programme of Financial Capability and the FSA’s consumer communications.
In that publication the FSA also asked for feedback from industry and consumer bodies to gauge if a wider consensus could be reached as to what is the appropriate balance of responsibility between consumers and firms in the sale of financial services products.
The regulator concedes that the feedback statement acknowledges that the responses reflected a variety of views and there was no consensus. In the absence of wider agreement on where the balance of responsibilities lies between firms and consumers, the FSA will maintain its current approach as set out in the discussion paper.
Dan Waters, director of retail policy and conduct risk, said: “The FSA believes in the importance of having a transparent policy-making framework. The feedback statement and our original discussion paper set out for the first time the approach we take to consumer responsibility and will help the industry understand our approach to this important topic.