Financial Services Bill Debate

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Department: Leader of the House
In October, the Treasury correctly stated that it was not possible to fully enable cashback without a purchase because of barriers from the European Union, not least the PSD. Well, that barrier has now gone. Does my noble friend the Minister agree that it would be a real boost for individuals, businesses and communities if cashback without a purchase could be enabled—for all those individuals who need, rely on and trust cash, and all those businesses that could have an additional strand by being able to offer this service? It may well be the case that cash is no longer king. It is certainly very much the case that cash still has currency. Does my noble friend agree—and does he agree that this amendment needs serious consideration between now and Report?
Lord Leigh of Hurley Portrait Lord Leigh of Hurley (Con) [V]
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My Lords, I shall speak on Amendment 135 in my name, although I find myself in agreement, as is so frequently the case, with the noble Lords, Lord Tunnicliffe and Lord Stevenson of Balmacara, on their amendments, and, of course, with my noble friend Lord Holmes of Richmond, who very kindly served as my warm-up act for my amendment. With such unanimity, let me explain what this is about.

At Second Reading, the Minister might have read that I raised two issues of concern. The first was that FOS and the FCA had been overzealous and overreached themselves. As a result, they had destroyed a segment of the financial services industry, namely the SIPP industry. I was disappointed that there did not seem to be anything in this Bill dealing with that, but I am pleased to say that I have had constructive meetings with the City Minister, John Glen, and representatives of the FCA and FOS and there are further meetings ahead. I accept that this matter will not be in this Bill, but perhaps it will be dealt with at a later stage elsewhere.

The second matter that I raised was about a situation in which FOS and the FCA were not doing enough to protect consumer interests, and I had an idea that might enable them so to do. As the Minister here today was not at Second Reading, I will just remind him of the reason why I have raised this. In the summer, I received a letter in the post with a credit card in my name, which was very nice except that I had not applied for it. It arrived unsolicited. I did not think too much of it, but a few days later—in those halcyon days of last summer when one could go outdoors and talk to one’s neighbours—a neighbour mentioned to me that they had seen some slightly unsavoury-looking individual rummaging through my letterbox at the front gate. I managed to put two and two together and worked out what had happened. Someone had found my home address and date of birth—which is not difficult, I am sorry to say, because they are available at Companies House; I have since changed that, but it is generally true. Then clearly he applied for a credit card in my name and was rummaging around in the letterbox to find it and to find the PIN, which followed in the post a few days later. It was clearly an unsatisfactory situation.

I contacted people in the company concerned, which I shall not name on this occasion, and complained that it was odd that they had sent me a credit card that I had not requested. I invited them to explain why and perhaps to change their procedures. They replied that they were sorry to hear it, but as I had not lost any money, there was nothing that they could do, or chose to do. Eventually, after a few letters and emails, they sent me a form to use to complain to FOS. I could not resist, of course, so I put a complaint into FOS—and it took FOS six months to reply to the complaint. After six months, a very well-crafted letter arrived from FOS, explaining to me that it could not help me because I was not actually a customer of the credit card company concerned. I was a potential customer of the credit card company concerned, and under the FCA handbook—the FCA instructs FOS—it has no power to deal with situations in respect of potential customers.

There were audible gasps of horror at Second Reading when I explained the situation, and my noble friend Lord Agnew agreed to write to me because he, too, was surprised. He wrote to me on 9 February and said:

“As you set out in your speech, the FCA is responsible for setting the rules for what complaints the FOS are able to consider. These rules do not allow FOS to consider a complaint from someone who is not a customer or potential customer of a firm. Extending eligibility to make a complaint to the FOS about a firm that they are not a customer or a potential customer of would be a very significant expansion of the FOS’s remit, which could result in delays to other complaints being resolved. However, the FOS are able to consider complaints from people who are being pursued for a debt that is not theirs following an identity theft. Therefore, had the attempted identity theft you experienced resulted in losses, then the FOS would have been able to consider a complaint from you.”