4.3 The protection safety nets
In this animation you will examine the various features of regulation that provide protection to consumers in the financial market place. The focus is on the protection afforded to consumers before, during and after the sale of financial products.
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MARTIN UPTON
The protection of consumers in the financial market place has several facets which we can liken to a series of safety nets.
As we have already seen the rules governing the sale of regulated products - particularly suitability reports and cooling-off periods are the front line of consumer protection.
But there are other aspects to protection that we will examine in the coming sections. Consumers are protected by rules aimed at preventing firms from making misleading statements about products.
When customers place their funds with a financial firm there are rules governing the segregation of their assets from those of the financial firm - which is important if the firm gets into financial problems. Additionally the Data Protection Act requires financial firms to adopt procedures regarding the holding and use of personal data to protect the rights of consumers.
If there are grounds for making complaints then consumers may be able to make representations to the Financial Ombudsman Service (or FOS)
And if a financial firm defaults customers' money is protected - subject to limits and the specific product involved - by the Financial Services Compensation Scheme (or FSCS)
And at all points before, during or after dealings in financial products, guidance and information is available to consumers from bodies like the Money Advice Service, Pension wise and Citizens Advice.
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