Axa has attacked the Competition Commission’s decision not to impose price caps on home credit lenders, saying it highlights the regulatory bias against the pension industry.
The commission decided against introducing price caps for the home lending sector, despite its two-year investigation revealing that customers had been overcharged by nearly 100m.
It proposed a range of measures to ensure lenders are clearer about loan costs but Axa head of pensions and savings policy Steve Folkard says the decision to stop short of price caps demonstrates the differences across financial services sectors.
The commission, which is controlled by the Office of Fair Trading, says price caps could force lenders out of the market, making products less accessible for people on low incomes. It also says caps could lead to lenders imposing additional charges on customers.
But Folkard says the same principle applies to the introduction of 1 per cent capped stakeholder products in 2001 and the FSA’s implementation of RU64 to stop providers selling more expensive products to customers.
He says: “This highlights the horrendously unlevel playing field. The regulation of lending products seems to be far more lenient than for pensions. The result of stakeholder and RU64 has been to restrict access to advice on savings products. The FSA even recognised this when they introduced RU64 but did it anyway.”
A Competition Commission spokesman says: “We had no involvement with price-capping in pensions. We just focused our investigation on one area.”