Money News

Brits get more power to seek compensation

The government’s new Financial Services Bill will allow the public to challenge banks collectively.

British consumers will be able to club together to seek compensation from financial services companies, under new measures detailed today.

Where there have been widespread problems, such as PPI mis-selling, a representative will now be able to bring an action through the courts on behalf of a group of consumers.

These measures are outlined in the government’s Financial Services Bill, which was introduced to parliament today. Other plans detailed in the Bill include the following:

• Establishing a new consumer financial education body
• Introducing a free nationwide money guidance service
• Banning unsolicited credit card cheques
• Creating tougher rules on pay and bonuses for bankers
• Giving additional powers to regulator the Financial Services Authority (FSA)
• Establishing a new Council for Financial Stability
• Requiring financial firms to develop ‘living wills’ so they can be wound down in future crises without excessive taxpayer support.

Chancellor Alistair Darling said: “The Bill seeks to empower consumers and make sure that, in the future, taxpayers will not be called on to protect banks from the consequences of their actions.”

Chris Eagle, commercial manager at Creditchoices.co.uk, said: “These measures are all positive, but they are not enshrined in law yet.

“With only around 70 days of parliamentary business left until the next election, it’s going to be a race against time for the government to squeeze these measures through parliament before then.”