Peers must ensure regulator has the power to prevent another hedging scandal

The Financial Services Consumer Panel welcomes the FSA’s action over misselling interest rate hedges. The Panel has called for action from Peers scrutinising the Financial Services Bill.

The Panel is concerned that banks and other financial services providers continue to mistreat their customers, despite numerous scandals and FSA investigations. The Panel is promoting an amendment to the Financial Services Bill to introduce a duty on firms to act honestly, fairly and professionally in their dealings with customers.

Adam Phillips, Consumer Panel Chair commented:

“We welcome the tough action the FSA has taken on misselling interest rate hedges. The settlement agreement is good news for hard pressed bank customers. This is clearly a vote of confidence in the FSA’s new tougher stance and the work of Martin Wheatley who will lead the new Financial Conduct Authority.

Yet again the regulator finds itself having to discipline misbehaving banks. It is high time that financial services providers acted with the same integrity as other professionals. The Panel has argued that financial services providers should have a duty to act honestly, fairly and professionally towards their customers. We are calling for Peers to support an amendment to the financial services Bill which will force banks to behave better.”

Notes to editors

1. The Panel’s briefing document[1] on the Financial Services Bill.
2. The Consumer Panel is a statutory body under the Financial Services and Markets Act 2000 and was initially established by the Financial Services Authority in December 1998. The Panel advises the FSA on the interests and concerns of consumers and reports on the FSA's performance in meeting its objectives.
3. The emphasis of the Panel's work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA's remit. More information about the Panel's work[2]
4. Photographs and biographical details for Adam Phillips[3]
5. Panel members are appointed to serve a maximum of two terms of three years.