CAS has responded to the Financial Conduct Authority's consultation on how they approach achieving their objectives in regulating financial products.
We are pleased at the way the FCA have approached financial regulation since the beginning of April this year, laying down strict rules for firms to commit to with strong powers to use against those who fail to act responsibly. The FCA have dealt with numerous high-profile enforcement cases in ways that we believe have had consumers interests at heart which we support them in continuing.
The FCA will take over regulation of consumer credit (including pay-day loans) in April 2014 and we are looking to them to replicate their strong work to this market too.
- We are looking to the FCA to take strong action on consumer credit companies who fail to meet expected standards when it takes over regulation of this sector in April 2014.
- The FCA should prioritise access to basic banking facilities and budgeting accounts for the most vulnerable in society as there is reluctance from those in the banking sector to provide these products despite the demand.
- The FCA should build a commitment to clear language in its expectations and standards from financial firms. Many financial products carry terminology that consumers find confusing or difficult to understand.
- In all cases where enforcement action is taken, the FCA should publically name individuals and firms when they have broken rules, this will act as a deterrent to others.
- Compensation schemes should have the consumer at the focus, with a strong emphasis on putting right the wrong, including reimbursing in full for all financial loss suffered.
- The FCA should use its powers to suspend firms from market activity for fixed periods of time as this could prove to be a much more effective method of enforcement than fines.
- CAS support the proposal that the proceeds of crime or abuse that is confiscated by the FCA be put into use to lessen the impacts of financial exclusion for those most vulnerable in society alongside providing better consumer education.