OFT consults on financial
services strategy review of unsecured consumer credit market announced
OFFICE OF FAIR
TRADING News Release (40/09) issued by COI News Distribution Service
on 7 April 2009
The OFT has
launched a consultation on its proposed financial services
strategy which sets out its approach to the sector in response to
the current economic crisis. The OFT is asking interested parties
to comment on its proposal to focus on two inter-related themes:
* The prioritisation, in the short term, of promoting fairness
and responsibility between the credit industry and consumers, and
* advocating choice and competition to ensure that public
decisions made to deal with the current crisis do not harm
competition in the long term to the detriment of consumers.
The strategy also announces that the OFT is to conduct a review
of the unsecured credit market. The financial crisis has led to
significant changes in this market and the review will focus on
the fair treatment of consumers and on ensuring that this key
driver of economic growth works effectively.
John Fingleton, Chief Executive, said:
'Much of our work is already aligned with the needs of
consumers, business and the economy in the current crisis but this
strategy will sharpen our financial services focus over the coming year.
'With our focus on credit, we are addressing the area in
which there is a real risk of short-term consumer harm while also
ensuring that the sector that emerges from the current crisis is
competitive and behaves fairly and responsibly towards consumers.
'Looking further forward, the financial services sector that
emerges should be characterised both by effective prudential
regulation and open markets. Choice and competition involving
existing players and new entrants are vital to delivering growth,
prosperity and a good deal for consumers. There is a risk that
this could be overlooked in the re-design of financial
regulations, with high costs for consumers and the economy.'
The consultation will run until 12 June 2009. A final Financial
Services Plan, taking account of consultation responses, will be
published in July 2009.
NOTES
1. The Financial Services Strategy consultation document can be
found online at: http://www.oft.gov.uk/advice_and_resources/resource_base/consultations/current/financial-services/.
2. The strategy was first announced in the Pre-Budget Report in
November 2008 (available on HM Treasury's website at
http://hm-treasury.gov.uk/d/pbr08_chapter3_190.pdf). This stated
that the OFT would set out a specific Financial Services Plan,
detailing how the OFT would build on its strong track record of
tackling anti-competitive behaviour and consumer detriment.
3. Details of the proposed unsecured credit review can be found
at http://www.oft.gov.uk/oft_at_work/markets/services/credit-sector/.
The OFT is seeking the views of stakeholders on its scope by 8 May
2009 with the intention of formally launching the review in the summer.
http://www.oft.gov.uk
PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk
OFT
reports and consumer information leaflets are available free
from:
OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@ecgroup.co.uk