The Office of Fair Trading 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.
