Consumers' Association alarmed by complaints reform proposals
25 November 2003
Reforms to financial services industry complaints procedures could leave some victims of mis-selling without any method of recourse, a leading consumers group has claimed.
The Consumers' Association's response to the Treasury's consultation on Complaints Transitioning argues that the proposed changes to mortgage and general insurance arrangements could leave some customers with nowhere to go.
The CA claims that some of the proposals would remove existing protections from people who were mis-sold products before the Financial Services Authority began to regulate the industry.
The Treasury has produced three options for the protection of people currently protected by the Mortgage Code Arbitration Scheme and the General Insurance Standards Council Dispute Resolution Forum: one being redress only through the courts; one being industry self-regulation; and the third being redress through the work of the Financial Ombudsman Service.
The CA is campaigning for the third option.
Laurence Baxter, Senior Policy Adviser, Consumers' Association, warned 'Giving industry responsibility for those consumers complaints who will not be protected by FSA regulation is outrageous.'
He concluded, 'Extending the Ombudsman's remit would be a far more effective solution. Not only does it have an excellent track record in dealing with consumer complaints, it has already earned consumers' trust.'