FSA confirms new consumer redress committee

The FSA has confirmed the establishment a new consumer redress coordination committee made up of the FSA, OFT and the ombudsman service.

The Coordination Committee (CC), which will draw together specialists from the three bodies to spot emerging risks, has already met in February when it examined a range of market risks including those posed by ETFs, SIPPs and housing and mortgage market-related threats.

Hailed by the regulator as part of the government's "vision for strengthened and formalised coordination" between the ombudsman and the regulator, membership of the CC comprises the FSA's conduct risk division, the executive director of the OFT's markets and projects group and the ombudsman service's decisions director.  A director at the FSA will be the chairman.

Its establishment is part of a strategy to "ensure there is effective and prompt redress for consumers when things go wrong".

Replacing the Wider Implications Process, the new committee's remit will be to identify emerging risks with the potential to cause "widespread detriment" and promote alignment between the OFT, FSA and ombudsman's response to emerging risks.

It will also consider whether serious emerging risks should be dealt with through firms' complaints handling and the ombudsman service or through regulatory intervention by the OFT or FSA.

Established in the wake of its discussion paper DP10/1 - which discussed the complaints handling environment - the FSA says most respondents to the paper expressed "overall support" for setting up the committee.

Alongside creation of the CC, the regulator said it will continue to pursue a policy of intensive supervision and deterrence to ensure effective customer redress.

Responding to concerns raised in the discussion paper that establishment of the CC leads the ombudsman into the regulatory fold, the FSA stressed creation of the committee does not alter existing statutory responsibilities.

"We note that existing legal restrictions on the exchange of information between the FSA, the OFT and the ombudsman service apply to the committee's operations," it says.

It adds summary minutes published from the committee's meetings will ensure transparency and give stakeholders confidence in the committee's role. The committee will also publish an annual account of its activities.

Alongside the new joint role for the regulatory bodies, the government has proposed introducing a statutory obligation for the ombudsman service and the Financial Conduct Authority (FCA) to publish and maintain a Memorandum of Understanding (MoU).

Building on the voluntary MoU already in place between the two bodies, this will set out how the ombudsman service and the regulator will work together, especially on issues where individual ombudsman service cases could have wider implications.

Meanwhile, the regulator said it will continue to liaise with the Claims Management Regulator (CMR), including sharing intelligence. This follows a recently signed MOU between the FSA and CMR setting out how the two regulators will work together in areas of common interest.