The committee would be tasked with identifying any risks which could become widespread as well as ways of dealing with them, whether it be through regulatory action or consumer complaints.
Specialists from the three bodies would come together to spot emerging risks in the hope of dealing with the threats quickly. The FSA says the focus on emerging risk would complement its existing supervision regime.
FSA director of conduct policy Sheila Nicoll says: “Complaints handling is a priority area within the FSA’s intensive supervision agenda. The co-ordination committee is a clear indication of the intention, and will, of the authorities to work even more closely together to improve the experience of consumers, and to avoid problems happening in the first place.”
Interim chief ombudsman David Thomas says: “The ombudsman service is committed to preventing complaints, as well as resolving them. It’s key for regulators and the ombudsman service to continue working closely together to identify potential problems as soon as they emerge, to ensure that consumers are treated fairly and can have confidence in financial services.”
OFT director of consumer credit Ray Watson says: “”Identifying and dealing with problems at an early stage is important for ensuring consumers do not suffer unnecessary harm from financial products. We believe that the proposals for a new co-ordination committee and the focus on risk will improve our ability to deal with problems before they become widespread.”
“It presumably is no co-incidence that FSA’s proposed new consumer protection committee has such strong echoes of the Tories’ plans under its own Consumer Protection Agency”, says Ash Saluja of law firm CMS Cameron McKenna.
“Financial product design is now clearly fair game for the regulator. Although it is still unclear how intrusive the regulator will really be, we are still a long way from product pre-authorisation. But can we be sure that the judgement of the regulator is better than that of product providers”?