There are laws and organisations responsible for protecting the rights of consumers in relation to personal finance. These help to ensure the consumer is not treated unfairly or exploited. The following organisations and laws are concerned with protecting consumer rights.

Financial Conduct Authority(FCA)

The FCA is an independent organisation with a remit to regulate the actions of providers of financial services. It is funded by membership fees charged to finacial service providers. The organisation's work focuses on three key areas:

• Authorisation- Permitting financial service to trade

• Supervision- Ensuring procedures and practices are in the interest of the consumer

• Enforcement- Using powers to ensure standards are maintained

https://www.bbc.co.uk/news/articles/c9dep6v0ee1o

The FCA's 4 main powers are listed as:

• withdraw a firm's authorisation.

• prohibit specific individuals from conducting regulated activities.

• suspend firms and individuals from regulated activities.

• issue fines where there has been a breach of their rules or if they commit market abuse.

https://www.bbc.co.uk/news/business-66311343

https://www.bbc.co.uk/news/articles/c9dep6v0ee1o

https://www.fca.org.uk/news/press-releases/fca-confirms-price-cap-rules-payday-lenders#:~:text=sized%20image%20PDF-,Initial%20cost%20cap,principal%20and%20fixed%20default%20charges).

Financial Ombudsmen Service(FOS)

The FOS is an organisation appointed by the government to represent the interests of the consumer in disputes with financial service providers. It is funded by fees charged to all regulated financial institutions plus additional fees when actions are taken against an institutions. The FOS becomes involved in disputes only if they cannot be satisfactorily sorted between the consumer and the financial institution prior to involving the FOS.

Financial Services Compensation Scheme (FSCS)

This is an organisation in the UK that will pay compensation to a consumer of financial services if the service provider is unable to. They protect all savers in banks, building societies and credit unions up to £5,000, meaning if the provider goes bust the individual will get a refund from FSCS.

Key roles:

Provides a compensation service for customers up to a given level/protects money in accounts up to £85 000/£170 000 for joint accounts 

• Raises public confidence in the financial services industry 

• FSCS protects against misleading financial advice.  

Office of Fair Trading

The OFT is a government organised body that was established to regulate all markets, including financial markets. The OFT's aim was to encourage fair practices and healthy competition between financial institutions. Since 2014 responsibility for financial institutions has been passed to the FCA.

Legislation: Consumer Credit

These are laws passed by the UK government to enforce the regulation of any firm offering credit to consumers. Any firm offering credit, for example leasing, hire purchase agreements or credit cards, must be registered with the FCA.

The Consumer Credit Act is an important piece of legislation that protects the rights of consumers and regulates how most retail lending and credit is handled in the UK. It was initially introduced in 1974 and was amended in 2006.

This legislation sets out how businesses that lend money or offer goods and services on credit should conduct their business and advertise those products, as well as requiring them to be licensed by the Financial Conduct Authority (FCA).

The Consumer Credit Act, and other related pieces of legislation such as the Financial Services and Markets Act 2000, cover many different areas, including:

• the pre-contract information providers need to give consumers before they take out any form of credit

• key elements that must always be shown in consumer credit agreements

• how annual percentage rates (APRs) should be calculated

• instructions on what happens for defaults, terminations and early repayments

• rules on how credit is advertised

• additional protection for credit card purchases costing more than £100 but less than £30,000.

In addition, before a credit agreement is granted (or the amount borrowed is significantly increased), the lender must assess the consumer’s creditworthiness. This must be done using information that the consumer has supplied, as well as an FCA-licensed credit reference agency, where necessary.

Click here to find out more about the Consumer Credit Act.