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View from City Road: Watchdog for the watchdogs

Thursday 10 June 1993 18:02 EDT
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Who needs another layer of regulation? The National Consumer Council, a quango funded by the Department of Trade and Industry, has suggested creating yet another supervisory body, this time to oversee the various financial ombudsmen. The idea is that consumer representatives would be in the majority, which sounds like more jobs for lobbyists.

The ombudsmen were put in, quite rightly, to provide an impartial view on the treatment meted out to customers by banks, building societies, insurance companies and others.

They work in different ways but most are overseen by a council including representatives of the public. The Building Societies Ombudsman's council, for instance, has an independent chairman, three building society representatives, and four outsiders.

It is difficult to see how an umbrella organisation looking over the shoulders of this council would necessarily provide any better safeguards. Worse, there is a danger it would confuse consumers, already uncertain how to find their way round the regulatory jungle.

The NCC's suggestion that ombudsmen should publish the names of frequent offenders is no less controversial. It believes this would increase public awareness of the ombudsman scheme.

It could, however, lead to league tables of 'good' and 'bad' firms. But just as there is doubt about exactly what league tables of schools' exam performance say about the quality of schools, reports of clashes with the ombudsmen could also be misleading. Much would depend on the complaints procedures within firms. The NCC should think again.

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