The FSA says it would support giving consumer groups the right to trigger super-complaints but warns the power should not be given to industry bodies or private law firms.
In June, the Government ruled out giving consumer groups the power, which was proposed in consultation documents that informed the draft Financial Services Bill.
Giving evidence to the committee scrutinising the bill last week, FSA conduct of business unit interim managing director Margaret Cole said: “A super-complaint mechanism for consumer groups is fine, it is a good idea. What I would be concerned about is if it extends to parties who I think should not have the benefit of such a mechanism, in particular, industry groups and private law firms.”
Cole said industry groups could use the power to force the Financial Ombudsman Service to stop considering individual cases where products have caused consumer detriment.
She said: “I have heard a lot of noise that industry groups think it should apply to them. We would have a lot to say if there was a move to extend it to them.”
In its submission to the Treasury select committee’s inquiry into the Financial Conduct Authority, Consumer Focus called for the regulator to have a statutory duty to investigate and respond to super-complaints from designated consumer bodies.