Turner wants FSA to have more power to protect bank customers

The reputation of banks, and the confidence that consumers have in these financial institutions, has plunged over recent years, since the onset of the global credit crisis in 2007. With this in mind the chairman of the UK’s financial regulator, the Financial Services Authority, has called for the authority to be given greater powers to protect bank customers.

Lord Turner said that the FSA needs greater powers in order to protect consumers. The FSA is now set to launch a discussion paper based on the protection of bank customers. The debate will be centred around how the FSA could help, and what sorts of measures it could take in order to protect customers.

Officials from the FSA said that they want to find ways to take action to protect bank customers earlier on rather than having to wait until a number of complaints have been made before any action is taken. Some of the measures that the FSA is likely to look at will include the banning of some financial products, and a cap on the fees that are being charged on a variety of other financial products.

Lord Turner is set to argue that the FSA, or its replacement agency if it is disbanded, should be given greater powers to give bank customers the protection that they want and need. This comes following a surge in activity at the FSA, which has been cracking down on insider dealings, and has enforced a greater number of fines over the recent years.

Referring to the debate one FSA spokesperson said: “The debate will be about the types of things we do, different product regulation. Rather than waiting until lots of consumers have had to make complaints, can we take action earlier?”

Tags: agency, paper, hector sants, cap, replacement agency, confidence, onset, financial

Personal loan rates need to be capped

Calls have been made for the government to put a cap on the interest rates charged on personal loans. This follows research that showed that most consumers in Britain want to see a cap on the rates of interest that lenders can charge for personal loans. The research was carried out recently by Compass on behalf of YouGov.

According to the results of the study around 68 percent of consumers believe that the government has a responsibility to protect consumers who take out personal loans by ensuring that a cap is put on personal loan interest rates. In addition to this the research found that a similar number of people, around 69 percent, wanted to see government officials promoting affordable means of credit such as credit unions.

Earlier this year a report was produced by consumer watchdog group Consumer Focus, and this showed that the popularity of ‘legal loan sharking’ was increasing. The watchdog’s report showed how the number of people that were taking out payday loans had quadrupled in the past four years, with around 1.2 Brits now taking out such loans.

The Association of British Credit Unions also issued a recent warning to consumers, warning them to be vigilant for loans that seemed attractive but in actual fact charged up to 2500 percent in interest per year. Compass said that the calls for caps on personal loans would be a test to see whether the new government would be supporting consumers or lenders.

One Compass official said: “This is a key test of the coalition government’s stated commitment to create a fairer society. Now we need to see if it backs the people or the financiers.”

Tags: credit, cap, interest, loan, Britain, finance

Competition Commission plans to look into PPI

PPI, which stands for Payment Protection Insurance, is a type of cover that is often sold with loans, credit cards, and other forms of credit. The purpose of the cover is to make repayments on the debt for a certain period of time if the policyholder cannot work and earn money due to illness, accident, or redundancy. The cover is often costly, but can prove valuable to those that can use it, as it offers peace of mind. However, it has been found that the cover has often been sold to those that can never claim on it, such as retired people and those that are self employed. Read more

Tags: rocket record deposits, cap, direct advertising, U.S. Producer Price Index, use, payment protection insurance