MPs have called on the Government to scrap plans to promote the new Consumer Protection and Markets Authority as a consumer champion.
The Treasury’s consultation paper on the changes to regulatory architecture, published last summer, stated the CPMA will be a “strong consumer champion”.
But in a report released this morning, the Treasury select committee says using the phrase “consumer champion” is inappropriate, confusing and potentially dangerous.
The report, focused on the Government’s financial regulation proposals, says: “We strongly urge the Government to drop the title of ‘consumer champion’ from the CPMA.
“If a regulator is promoted as a consumer champion, consumers may falsely believe all financial products are risk free, creating moral hazard. It is simply not possible to protect every interest at all times.”
Speaking to the committee yesterday, Treasury financial secretary Mark Hoban said: “People should not see the CPMA as a consumer advocate. What we are looking for is good outcomes for consumers.”
The TSC report says effective regulation should be in the best interests of consumers but that regulators should ensure their regulation is effective and proportionate.
The committee says the CPMA should have competition as a primary objective as it is a highly effective way of protecting consumers.