FSA, OFT to Cooperate on Regulation of Payment Protection Policies

The U.K.’s Financial Services Authority and the Office of Fair Trading (OFT) jointly announced that they are working on producing “an action plan” covering payment protection policies, which they hope to publish by the end of April.

The bulletin said their work would concentrate on the following sectors:
— Working more effectively together, for example through improved collaboration on matters of mutual interest such as the sale of Payment Protection Insurance (PPI);
— Collaborating more closely on enforcement of rules on advertising and other matters, and on guidance to business. For example, in April 2006 the FSA will consult on a change to its rules so that advertisements subject to dual regulation need contain only one risk warning;
— Completing a feasibility study by September 2006, on ways to reduce the administration burden on firms either seeking authorization from, or regulated by, both organizations; and
— Working more closely together on consumer education and providing information to consumers. A feasibility study on greater alignment of the FSA’s consumer contact center with the OFT’s Consumer Direct service will be completed by October 2006.

“These improvements, and others like them that will be included in the Action Plan, will help reduce the administrative burdens on firms and assist in the delivery of risk-based regulation, the key objectives of the Hampton Report,” said the announcement. “As such, and following consultation with stakeholders, the Government has concluded that a significant better regulatory outcome is achievable without changing regulatory responsibility for consumer credit.”

FSA Chief Executive John Tiner commented: “The FSA and OFT have a common interest in delivering better regulation benefits. Building on our existing liaison arrangements we have identified improvements to our processes and practices that will benefit consumers, firms and our organizations.”

John Fingleton, OFT Chief Executive, indicated: “OFT and FSA interests coincide in a wide range of areas, from ensuring that markets work well, to informing empowering and protecting consumers. We believe that we can and should work more effectively together to the benefit of all our stakeholders, to deliver greater benefits for consumers and the UK economy alike.”