Labour wants the Financial Conduct Authority’s competition objective extended so it has to consider how easily consumers can find appropriate products that are good value for money.
This would add to the regulator’s operational objective of promoting effective competition in the interests of consumers by setting out what those interests are.
The Financial Services Bill already says the regulator should take account of the varying needs of different consumers and the information they need to make informed choices, the ease of switching providers, the potential for new entrants to the market and how far competition is encouraging innovation.
A Labour amendment being considered by MPs this week calls for the FCA to also have regard to “the ease with which consumers can identify and obtain services which are appropriate to their needs and represent good value for money”. Shadow Treasury financial secretary Chris Leslie says: “I want the FCA to be able to stop unfair overdraft charges, excessive fees and complicated pricing structures where they hinder transparency that might benefit the consumer.”
Guidance published alongside the bill in January said the FCA will not directly regulate prices but will try to spot potential consumer detriment and flaws in competition by looking at “comparative prices” and hidden costs.
Leslie says: “The Government has not gone far enough to tackle behind-the-scenes prices which can mask the true costs of financial services.”
Baronworth director Michael Brill says: “If the regulator gets this role, it must make sure people understand the charges, rather than being bombarded with confusing information.”