I think I just swore on Hansard – the official Parliament record. I’ve been at the Treasury Select Committee in Parliament, giving evidence on future financial regulation. There were about eight MPs on the Committee questioning me for over an hour. I’ve given evidence before but normally you’re with others. This time I was by myself.
I have to be honest, I was pretty petrified beforehand, and had been cramming to make sure I knew all the acronyms (FPC, PRA, CPMA, CFEB) of all the new proposed bodies and what they are all supposed to do. The Committee themselves are pretty decent bunch of MPs, and they all had their own focus – an impressive lot.
You can listen to and read the full evidence session here:
My main focus
As it’s email day, I’m dashing this blog out at speed, so I’ll just focus on my main point amongst many.
Banks deliberately use the regulatory system to stop consumers getting justice. They reject complaints so people must go to the Ombudsman and most people are put off. Yet go to the Ombudsman and in some areas over 80% of complaints are upheld in Consumers favour. Worse, if a different person made an identical complaint to one just upheld by the Ombudsman, the banks still reject it. There needs to be some way of spotting systemic abuse and issues and dealing with them to save consumers hassle. Especially the least capable consumers.
It was on this point that I think I may’ve sworn. One member said: “It’s been suggested by the industry that the Ombudsman should charge a fee to stop frivolous complaints” and I think I was so fuming with this suggestion I may’ve sworn in response (though it’s all a bit of a blur), saying it was an outrageous suggestion, and until the banks stop frivolous rejections then they have no right to suggest the Ombudsman have a fee. We need to encourage people to go to the Ombudsman, not deter them. Already too few people whose complaints are rejected take them up.
Yet it was about far more than that
I wasn’t just there to put across my own point but to answer questions, and they were very wide ranging (it felt a bit like sitting an exam). Issues that came up include some raised by me in discussion and some by the MPs.
- Financial Education
- Should there be an interest rate cap
- The work of the FSA in education
- The danger of mortgage rate increases
- Should IFAs be commission or fee based
- How MSE operates
- Will the new Financial Policy Committee and Consumer Protection markets authority have a natural clash
- The fact the word FSA registered means nothing and gives false confidence i.e. Crown
- Savings safety confusion
- How to regulate to keep costs lower
- Are there any trends in stealth charges
- It’s not just about giving information but explanation.
And these are just off the top of my head.
It’s an interesting experience, because answering almost becomes a reflex action while questions are being battered at you from all sides (it is a cross-examination of course).
The Committee Chair, Andrew Tyrie MP (Conservative) opened, asking about whether the new CPMA should be a consumer champion body. I mulled over whether a regulator should be, certainly it should be pro-consumer, but for me to be a consumer champion you need to be unapologetically biased to think only of consumer issues and ignore the wishes of business, and I’m not sure a regulator should do that.
As we went on I learned that George Mudie MP (Labour) was a fan of the site and sends his constituents to it, which is fab. He was also pushing for a Consumer Minister who, like the womens minister, is solely focused on consumer issues. He asked my view, which was great, but if they are going to do it, then again they need to ignore business interests and let that be defended by others e.g. department for biz.
As I try and remember what I said (not easy), I keep coming up with things I missed e.g. on capping interest rates I talked about it being a blunt tool, but didn’t voice my worry that it’d lead to more people using illegal loan sharks. On FSA registration I talked about Crown Currency, but didn’t mention the lack of protection for consumers (though that’s outside of the remit anyway) and many more.
Overall though, I hope it was useful and I got my points across and, more importantly, got things right – not that easy at such speed.
I have to say, even though I’m virtually tee-total, I feel like a stiff drink (though as it’s a Tuesday, and I started early on Daybreak this morning, and have the weekly email to do now, that won’t be happening).
PS. In the Chair’s summing up, Andrew Tyrie MP thanked me for something like an “informative and entertaining” session, with the emphasis on entertaining, so I suppose I may have been in my animated mode.