As part of its new consumer protection strategy introduced last year, the FSA has already introduced a more interventionist approach with the aim of anticipating consumer detriment where possible and stopping it before it occurs.
The approach aims to reduce consumer detriment by dealing with problems earlier, scrutinising the whole of the product lifecycle from start to finish rather than just focusing on the point-of-sale.
The paper sets out a range of future interventions that could be introduced in areas where the potential for customer harm is greatest. These might include interventions such as banning products or prohibiting the sale of certain products to specific groups of customers.
In the foreword to the discussion paper, FSA chairman, Lord Turner, said: “The crucial issue is how far along this spectrum of earlier and more intense interventions we should progress. This debate comes at a critical time as the scope and powers of the Consumer Protection and Markets Authority are being discussed by the government, parliament and stakeholders. It is fundamental to shaping the regulatory philosophy of the new organisation.
“Our analysis has led us to the conclusion that a significant shift in approach is required but there are important tradeoffs to be struck – between consumer protection and consumer choice, between effective regulation to prevent customer detriment and the costs that that will inevitably impose.”
