Select Committee on Treasury Written Evidence



  The Financial Services Consumer Panel (the Panel) was established by the Financial Services Authority (FSA) in December 1998 to represent the interests of consumers in advising the FSA on its policy and practices and monitoring its effectiveness. Subsequently, the Financial Services and Markets Act 2000 (the Act) made it a statutory requirement for the FSA to establish and maintain a Consumer Panel. The relevant sections of the Act came into force on 18 June 2001.

Role of the Consumer Panel

  The main purpose of the Panel is to provide advice to the FSA. Consequently the emphasis of the Panel's work is on activities that are regulated by the FSA. The Panel is also responsible for assessing and commenting on the effectiveness of the FSA. In addition the Panel looks at the impact on consumers of activities outside but related to the FSA's remit. Examples include European issues and policy proposals by HM Treasury and others. The Panel has regard to the interests of all groups of consumers, including those who are particularly disadvantaged in the context of financial services. The Panel can also advise the Government on the scope of financial services regulation; and consider other matters that assist it in carrying out its primary functions.

How the Panel operates

  The full Panel meets about 10 times per year. In addition, smaller "working groups" meet monthly to deal with species issues in more detail and to consider the Panel's formal responses to FSA and other consultations. FSA staff and other third parties are invited to these meetings and participate in discussions. The Panel also holds meetings outside the FSA's offices (most recently in Cardiff) with members of the financial services industry, as well as with consumer representatives. The Panel now has closer links than ever before with its statutory counterpart, the Financial Services Practitioner Panel, with a view to developing a better understanding of industry viewpoints and working together wherever possible to tackle areas of mutual interest. Although the Panel has less direct involvement with The Smaller Businesses Practitioner Panel, we do exchange minutes and hold occasional joint meetings. From time to time, the Panel also commissions research to obtain a better understanding of consumers' views and to identify areas of concern. A monthly report of the Panel's work and concerns is provided for the FSA Board.


  The Panel publishes an annual report on its activities. Annual Reports, responses to consultations, research reports and other information is available on the Panel's website at The website contains the Panel's e-mail address, but makes it clear that the Panel is not in a position to pursue individual or specific complaints from the public about financial services. The Panel does however consider carefully the wider implications of any complaints or other information provided by consumers and others who contact the Panel.


  Panel members are appointed by the FSA Board following an open recruitment process based on the Nolan principles; the appointment of the Chairman must have the formal approval of the Treasury. John Howard became Chairman of the Consumer Panel with effect from 1 October 2005, having been a Panel member since October 2000. Adam Phillips, who joined the Panel in March 2004, was appointed Vice Chair with effect from 1 November 2005.

  Members of the Panel have a wide range of relevant experience such as consumer advice and advocacy, front-line advice, legal expertise, market research, consumer policy and the media.


  On 4 November 2005 the Financial Services Consumer Panel hosted a one-day Conference for Consumer Groups in the EU. At the end of the Conference delegates agreed a resolution to be sent to the Commission which sets out the action that delegates believe the Commission needs to take to ensure effective dialogue between consumer groups in Member States and policy-makers in Europe. My purpose in writing to you is to present this Resolution formally and to seek your response by the end of January 2006.

  First I should explain something of the background to the Conference. The Panel decided to organise the event in response to earlier comments by the Commission about the lack of consumer representatives to consult on financial services issues. Clearly something needs to be done. The Panel wants to ensure that the positive and negative impact of policy changes on consumers is communicated effectively to the Commission from an informed standpoint in all Member States. We also wanted consumer groups that are not/cannot be members of BEUC, for example, to have access to a consumer-facing network of consumer groups in the EU. The Conference was a first step towards meeting these objectives.

  The principal aims of the event were to:

    —  develop a pan-European network of consumer groups interested in financial issues;

    —  identify key issues for consumers of financial services in different EU countries;

    —  compare how the different groups are working to tackle those issues;

    —  debate how to get a more effective voice for consumers in Europe; and

    —  look at how consumer groups can work better across the EU in future.

  As well as consumer representatives from a large number of Member States, delegates included members of FIN-USE, BEUC and UK-based consumer groups. Speakers included Harsha Shewaram from DG Internal Market whose input was particularly valuable. We are grateful to Harsha for spending so much time at the Conference and for participating so positively. We also heard from Dominique Forest (BEUC); Manfred Westphal (FINUSE) and Paul Wright from the UK Financial Services Authority.

  The Conference, which was preceded by an informal dinner the previous evening, went a long way towards developing a pan-European network of financial services consumer groups and we are committed to developing this further. As I said earlier, Conference delegates also agreed on a Resolution to be put to the Commission and a copy of this is enclosed.

  I will be happy to provide further background to the Resolution and also to answer any questions you have, either in writing or at a meeting. I hope that the Commission will react positively to the steps that the Panel and the Conference delegates have taken to respond to the Commission's comments about the lack of financial services consumer representatives in Europe.



  At a meeting held in London today, representatives of consumer groups from across the EU, resolved to work for the following to take place:

  1.  The Commission to call on Member States to support consumer groups with knowledge of financial services.

  2.  The creation of an additional forum organised and funded by the Commission, consisting only of consumer representatives.

  3.  The Commission to publicise more widely to consumer groups, its work plan and road maps.

  4.  The Commission to create and distribute to national consumer organisations, consumer relevant summaries of financial services discussion documents in all EU languages. This should reduce the demand on the scarce resources of national consumer groups.

  5.  A similar more proactive open approach to obtaining consumer input to be developed by other European players such as the Lamfalussy Committees.

  6.  The Commission to collect, on a comprehensive basis, evidence of how consumers fare in financial markets across the EU, showing problems and strengths of different approaches.

  7.  The Commission to increase the money available to European consumer bodies such as BEUC to strengthen the resources for financial services work.

  The consumer bodies at the conference were:

    —  Financial Services Consumer Panel, UK;

    —  Citizens Advice, UK;

    —  Which?, UK;

    —  Konsument, Austria;

    —  Test-Achats, Belgium;

    —  Cyprus Consumers Association;

    —  Spotrebitelsky poradensky a informacni Servis, Czech Republic;

    —  Consumers Defence Association, Czech Republic;

    —  Estonian Consumers Union;

    —  German National Consumer Association;

    —  National Association for Consumer Protection, Hungary;

    —  Consultative Consumer Panel, Ireland;

    —  Consumer Rights Protection Centre, Latvia;

    —  LN Consumers Federation, Lithuania;

    —  Consumers Association, Malta;

    —  Consumentenbond, Netherlands;

    —  Associacao Portuguesa para a Defense' do Consumidor, Portugal ZPS, Slovenia;

    —  ADICAE, Spain;

    —  BEUC (Bureau European des Consommateurs).

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2006
Prepared 8 June 2006