MPs to probe consumers’ access to financial services
A cross-party group of MPs is investigating whether vulnerable customers struggle to access basic financial services, and if they pay a premium for products such as insurance.
The Treasury Committee will examine whether certain groups of consumers are excluded from obtaining a basic level of service from providers such as banks and insurers.
And it will also look at whether vulnerable consumers pay more for financial products, particularly home and travel insurance.
It comes after the regulator, the Financial Conduct Authority (FCA), launched a study into how insurance firms charge their customers for home and motor insurance.
What will the MPs be looking at?
The MPs will look at several key topics as part of their inquiry.
Among these, it will be looking at what a 'vulnerable' customer is and how practical the definition of vulnerability used by the financial regulator, the Financial Conduct Authority (FCA), is.
It will examine which customers can be most disadvantaged when bank branches close, and whether there is evidence that this leads to increased financial exclusion.
The committee will also consider whether vulnerable consumers have access to appropriate and affordable credit, and whether reducing the number of free-to-use ATMs could have an impact on them.
What does the Treasury Committee say?
Commenting on the launch of the inquiry, MP Nicky Morgan MP, Chair of the Treasury Committee, said: "Vulnerability, as defined by the FCA, is where someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care.
“With customers expected to take more responsibility for their financial planning and resilience, bank branches closing, and the number of free-to-use ATMs falling, it’s becoming increasingly difficult for vulnerable customers to access certain financial services.
“The committee will examine the practicality of the FCA’s definition, the effectiveness of attempts by financial services providers to prevent increased financial exclusion, and whether a premium is placed on products such as travel insurance for vulnerable consumers.
"As part of this inquiry, we'll be holding sessions outside of Parliament to hear from vulnerable consumers who have interacted with financial services providers."
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