The Treasury has published a consultation paper seeking views on who should deal with consumer complaints about mortgages and general insurance products bought before new protection for consumers comes into force.
The consultation paper, Mortgages and General Insurance Regulation: Transitioning Complaints, seeks views on whether the Financial Ombudsman Service (FOS) should be given powers to deal with complaints about products bought from Mortgage Code Compliance Board (MCCB) or General Insurance Standards Council members before Financial Services Authority regulation starts, but which arise after it comes into force.
The MCCB had previously voiced concern about this regulatory ‘gap’. Brad Baker, communications manager at the MCCB, said: “We alerted the Treasury to this gap and support its filling. How they fill it is a matter for the Treasury, but we are supportive of the consultative approach and the offered solution. It is up to the industry to support this as well and the Treasury is indicating it has not made up its mind in advance.”
Ruth Kelly MP, financial secretary to the Treasury, said: “Making transitional provision for complaints would benefit consumers. But this must be weighed up against the possibility of additional costs for firms, and any differences in approach and scope between the FOS and the current self-regulatory schemes. The paper will allow all parties to set out their views on how to proceed.”
The consultation document can be accessed at www.hm-treasury.gov.uk, with responses to be received by 30 November 2003.