My Lords, like the noble Baroness, Lady Kramer, we have added our name to the amendment of the noble Lord, Lord Holmes of Richmond, which takes us back to regulatory principles and the duty of care.
The noble Lord is right to have removed the “where appropriate” qualification from his earlier amendment. The amendment deals with the regulation of claims management, although this is seen as an opportunity to debate the wider calls for a duty of care across the financial services piece.
On the narrower point, we acknowledge that in Committee the Minister gave assurances about the FCA consulting on the design of new rules for claims management companies and taking account of its statutory operational objectives, including an appropriate degree of protection for consumers. However, we note that there is no current alignment of the objectives of the CMRU and the FCA, and there seems to be no certainty about where this process will end up.
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On the wider issue of duty of care, we should note the recommendation of the House of Lords Select Committee on Financial Exclusion that the Financial Services and Markets Act should be amended to require the FCA to make rules that require financial services providers to exercise a reasonable duty of care towards their customers. The Financial Services Consumer Panel suggested that,
“a duty of care … would oblige providers of financial services to avoid conflicts of interest and act in the best interests of their customers”.
According to Macmillan Cancer Support, a duty of care is supported by organisations including StepChange, the Financial Services Consumer Panel, the Money
Advice Trust and the Consumer Council, to name but a few. I think we have all had the briefing from Macmillan which outlines how cancer can bring a real risk of financial hardship and the difference that, for example, providers of mortgages can make in helping individuals to manage periods of financial difficulty. But there will need to be a change in culture if individuals are to have the confidence to tell their bank about their diagnosis.
The Minister has told us that we will receive the Government’s response to the Select Committee report before Third Reading. Are there any pearls that might be shared with us today, given the strong recommendations that it makes around duty of care?