FSCP urges FSA to give up on consumer responsibility

by Gill Montia

Story link: FSCP urges FSA to give up on consumer responsibility

The Financial Services Consumer Panel (FSCP), which exists to ensure that the Financial Services Authority (FSA) protects the interests of consumers, is urging the regulator to abandon its “unrealistic attempts to articulate consumer responsibilities in financial services”.

Instead the Panel wants the FSA to focus on getting the industry to deliver products and services that are fit for purpose and genuinely designed to serve consumer needs.

The Panel takes issues with the concept of “consumer responsibility” pointing out that financial products are quite different from other consumer goods.

According to the FSCP, “the complexity of many financial products and the difficulty of finding an acceptable way to describe risk” leave most consumers “ill-equipped to judge how a product will perform in future, and whether it meets their needs”.

The body sees consumer responsibility as a “flawed concept” that places unrealistic expectations on consumers and gives firms an excuse to evade their responsibilities.

The Panel’s acting chairman, Adam Phillips, says: “The regulator should focus its attention on the firms it authorises, not the consumers it is set up to protect.”