§ Lord Cocks of Hartcliffe
asked Her Majesty's Government:
Whether they will encourage the Financial Services Authority to recommend that the American Express Bank credit card be included in the new single ombudsman scheme; and [HL2289]
Whether they will encourage the Financial Services Authority to recommend that all financial services provided by banks which are members of the new single ombudsman scheme should be covered by the scheme; and [HL2290]
Whether they will encourage the Financial Services Authority to recommend that credit cards should be covered by the new single ombudsman scheme. [HL2291]
§ Lord McIntosh of Haringey
The Government intend that a single ombudsman scheme for financial services should be set up under the planned legislation to reform the financial services regulatory structure. 33WA The scheme will replace eight existing schemes: the Banking Ombudsman, Building Societies Ombudsman, Financial Services Authority Direct Regulation Unit and Independent Investigator, Insurance Ombudsman, Investment Ombudsman, Personal Insurance Arbitration Service, Personal Investment Authority Ombudsman, and the Securities and Futures Authority Complaints Bureau and Arbitration Service.
The scheme will have both a compulsory and a voluntary jurisdiction. The compulsory jurisdiction will apply to all firms which are authorised under the reform legislation, such as banks, building societies, insurance companies and investment firms. All of the regulated activities of these firms, such as taking deposits, entering into insurance contracts and dealing in shares will be brought within the compulsory jurisdiction. The Financial Services Authority will also be able to bring other activities of these firms within the compulsory jurisdiction where the legislation provides powers for these activities potentially to be regulated. These activities could include, for example, mortgage lending, subject to the Government's proposed review of the case for regulation.
The scheme's voluntary jurisdiction could apply to the financial services activities both of authorised firms, where these activities do not fall within the compulsory jurisdiction, and of other firms. Decisions on whether to offer the scheme's services to firms on a voluntary basis will be for the ombudsman scheme with the approval of the Financial Services Authority.
It will be possible to bring all credit cards offered in the UK and other financial services provided by banks within the jurisdiction of the ombudsman scheme. Where the provider is not authorised, or where an activity is not subject to the compulsory jurisdiction, the ombudsman's jurisdiction will apply only with the agreement of the firm.
The draft legislation that the Government intend to publish for consultation in the summer will include the proposed statutory framework for the ombudsman scheme.