Wealth warning to finally tell consumers the truth
- 28TH JUNE 2007
The Financial Services Authority has finally launched its plans to properly educate the public, and have already begun to set the wheels in motion. In May this year it was announced that the store card with high rates of interest would have to place a wealth warning on every statement to ensure that customers are aware of just how much interest they are being charged. This, it seems, is only the first step.
The need to educate consumers was made glaring obvious when investigations into payment protection insurance commenced over eighteen months ago. Very few consumers out of the millions of individuals that actually held a policy knew what it was, much less what it could actually do for them.
In order to prevent the same sort of situation occurring in the future, the Financial Services Authority laid plans to educate consumers, and this has apparently stretched to all aspects of financial management and within the industry as a whole.
All cards, whether credit or store, must now inform its customers that there are cheaper credit agreements and loans out there. However, this only applies if the interest rate on a card is over 25%.
Simon Burgess of the ethical British Insurance has applauded the FSA’s handling on consumer education: “Sadly, many consumers trust their bank or other financial institution, believing that they are getting the best deal. These new measures – particularly that in relation to the payment protection insurance sector – are a positive step in the right direction towards customers being better informed when it comes to their financial choices.”
