The charity is particularly concerned that current proposals for the Financial Conduct Authority (FCA), due to take over the responsibility for consumer protection in the new regulatory regime, will leave the most vulnerable consumers at risk.
To prevent this, the charity is asking that the FCA board should always include a consumer specialist and that the post of Consumer Advocate should be created forthwith to champion consumer causes.
Malcolm Hurlston, chairman of Credit Action, said: "The intention is clear: FCA should seek to build a consumer perspective into all of its work. But the structure is missing. The asymmetry of power between financial consumers and providers is such that extreme measures are needed.
"In a fast-moving world consumers need heightened protection. Providers wield unprecedented information, technology and spending power which consumers alone cannot match."
In addition to its call for consumer power, Credit Action recommends:
Embedding in the FCA's policy-making the awareness that consumers have different levels of financial capability and therefore require different levels of protection.
Making sure the FCA's role as a regulator is widely understood by the public, as well as its relationship to other key organisations involved in industry oversight, so that consumers are always clear about where they find help in a given situation.
Ensuring that consumers have clear routes to redress and receive information in appropriate forms, as well as assuring them that real change takes place when the FCA intervenes.
Addressing financial inclusion and financial education issues; developing strong relationships with the Money Advice Service and other financial education providers will be crucial.
Mr Hurlston continued: "The way that we regulate the financial services sector is a hugely important issue, and is undergoing fundamental change. It's crucial that we get this process right, and that it serves the interests of consumers.
"While we are encouraged by the general proposals set out for the FCA, we also believe that regulators should always be looking to go further to enhance the way they protect and engage with consumers. We think our recommendations make a valuable contribution, and should be given serious consideration by the FCA."
