Justin Tomlinson: Why I was first to adopt the Which? watchdog
Milo, the Which? watchdog, is the face of our campaign for a strong, open and proactive financial regulator. In this guest post, Justin Tomlinson explains why he was the first MP to adopt Milo and what he represents.
One of the key lessons to come from the financial crisis is that consumer interests have been woefully under protected. Whether it be the mis-selling of PPI or hidden banking charges; for too long the financial sector has been able to hide behind a web of complex terms and abstract figures.
People have been forced to make decisions based on, at worst inaccurate, and at best confusing, information. The Financial Services Authority (FSA) failed to get to grips with the vast regulatory challenge placed before it and ultimately, consumers have suffered.
What the Financial Services Bill means for consumers
The Financial Services Bill that is currently being considered in parliament will completely change the way our financial sector is regulated, abolishing the FSA and replacing it with a number of more narrowly focused regulators.
Crucially, it will establish a ‘conduct of business’ regulator known as the Financial Conduct Authority (FCA) to make sure that business across financial services is conducted in a way that ‘advances the interests of all users and participants’. In short, it will establish a watchdog that stands up for the interests of consumers.
The challenge now is to make sure that the FCA has the teeth to deliver. I’ve been an active voice in parliament on consumer issues campaigning for greater transparency around financial products and I fundamentally believe that any regulator must put transparency at its heart. How the FCA achieves this goal is open to debate, but it must not fail. Without transparency, consumers cannot make informed decisions.
Why I adopted Milo
The excellent Which? Watchdog not Lapdog campaign pushes for the FCA to be: strong – standing up to banks and promoting competition; open – naming and shaming the firms that break the rules; and proactive – acting on issues before they become problems.
And I agree. The key to making the industry transparent is promoting clear and concise information about the products and services available. This should include things like displaying costs as cash values and standardising the terms used in advertising so that products are easy to compare and switch between.
But giving people the information to make informed decisions is simply not enough. We also have to make sure that consumers have the skills to make those decisions. Last year I led an All Party Parliamentary Group – the largest in parliament – in a campaign to see Financial Education made a compulsory part of the national curriculum.
With these key skills and a transparent financial industry delivered by the FCA, consumers will be empowered to make informed, savvy financial decisions. We can finally make sure that the consumer comes out on top.
Which? Conversation provides guest spots to external contributors. This is from Justin Tomlinson, MP for North Swindon – all opinions expressed here are their own, not necessarily those of Which?
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