FSA Consumer Panel… Bank Charges, PPI, and Setting off…

I’ve just travelled back from the FSA’s Canary Wharf headquarters, where I was invited to watch and speak at a meeting of its consumer panel, by acting Chairman Adam Philips. The panel’s charged with working to ensure FSA regulations work in the interest of UK consumers. Not an easy task, as of course consumer views span a broad range.

It’s been something we’ve been trying to arrange for a long time, and sadly has had to be cancelled by both sides as things have cropped up; so it’s great I finally made it, and the discussions were very productive.

In the past some people have suggested I apply to be on the panel (if they’d have me). There are many people I’ve worked with and have a great deal of respect for on it, such as Nick Lord, and a fellow journalist, Scam fighter Tony Hethrington, (see the full panel membership) but my view (as I echoed today) is that MSE is a campaigning website on things like Bank Charges and PPI. Thus, sometimes I disagree with the panel, for example on the hold on bank charges, and I think it’s better to stay free to keep MSE views, but also work in concert when possible.

A whole host of issues came up today. As well as the obvious big campaigns, here’s a few others, big and small…

• Claims Handlers: We discussed the growth of claims handlers for reclaiming. While they’ve been around a while, the worrying trend is those companies charging up front for reclaims which are very unlikely.
• Savings Rates: The fact even web-based savings accounts don’t list your current rate of interest – you need to search for it amongst a host of other rates. Surely in the modern technological age this can be done. Is it not done deliberately to add confusion? This is something I want to do some work on, but I’m still mulling the best way to approach it.
• Irish Protection Issue: As I’ve mentioned in past blogs, there’s a problem with the Irish protection system. Many people got accounts out being told, as the prevailing wisdom was, that the first £50,000 of any savings was protected by the UK FSCS. Now it turns out that this is wrong and all of it is protected by the Irish system. In the unlikely event there were to be a problem this would be a horrid issue. Remember we’re talking Post Office savings here amongst others, as it’s owned by an Irish bank.
• Insurer Stability: Another ‘future proofing’ issue, is one of the stability of the big insurers. We’ve seen problems with the banks, but not a big UK insurer as yet. This is another issue for the Financial Services Compensation Scheme and its important to see exactly how it would and could be handled. See Safe Savings for a further explanation.
• Setting Off. This is something I’m writing a note on for the weekly email next week. It’s where a bank is allowed to take money out of your account to pay off other debts with it, and sadly activating that clause is becoming increasingly common. In many ways this is a great example of how I hope sites like MSE can work symbiotically with the consumer panel. My suggestion will be the practical one for people who are struggling to separate their bank account from their debts: moving to a new bank. Then it’s hoped that on the other side the panel will be able to lobby the FSA, to tell it this is something that must be strongly looked at under the Treating Customers Fairly rules.
• Pensioner Poverty. With savings interest dropping rapidly there’s a big worry for those – usually older members of society – who rely on it for their income. Add this to the country’s aging demographic and possibly less tax revenue to pay out of the social security pot for pensions, and there’s a big potential problem. One of the worries is the reticence of some savers to use their capital, even if we get to a deflationary environment (see an explanation at the top of the weekly email of 18 Feb 2009), so perhaps an education process is needed.

I also offered the panel space in the forums, without any MSE interference (barring usual forum rules), so it can consult with consumers on specific issues – something I think and hope it’ll take up.

Overall it was a really useful meeting. I hope they feel the same.

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