29th January 2010
The Consumer Panel welcomed today’s announcement of the details of FSA full regulation of Sale and Rent Back – particularly the much stricter conditions on promoting these schemes. Sale and Rent Back is targeted at those who are in financial difficulties who will be vulnerable to selling techniques which obscure the downsides. Banning cold-calling, leaflet dropping and the use of emotive phrases in promotional material will be crucial – along with tighter monitoring of the activities of these firms.
Adam Phillips, Chairman of the Financial Services Consumer Panel said: "Sale and Rent Back has provided rich pickings for firms seeking to make money from people who are desperate. Firms have lured vulnerable people by the promise of being able to stay in their own home and getting cash up front quickly, without warning them of the longer-term consequences. FSA regulation of this area promises to provide better explanation and protection for consumers."
"However, the FSA must police this area thoroughly. We still have worries that firms will try to exploit consumers both within the rules, and by trying to operate outside the rules. The fact that only around 80 firms have applied for FSA authorisation, when the OFT had judged that there were over 1000 firms undertaking sale and rentback, means the FSA must watch the authorisation boundary carefully."
Notes to editors
The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.
The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. What we're doing for consumers explains more about the work the Panel is doing.
The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.
There are currently thirteen members of the Panel as listed below (for further information on individual members, see Who is on the panel)