Financial Services Bill

Baroness Altmann Excerpts

Report stage
Wednesday 14th April 2021 Lords Chamber

[Baroness Altmann (Con) [V]]

My Lords, I should like to speak first to Amendment 26, to which I have added my name, which was so excellently and comprehensively spoken to by my noble friend Lord Leigh. I support its aims and thank the Minister, my noble friend Lord True, who has spent time engaging with us on this matter. I urge the Minister to look carefully at the arguments laid before your Lordships this afternoon so well by my noble friend Lord Leigh.

There perhaps seems to be some confusion in the interpretation of “potential consumer”, because it would appear that in the FCA handbook there is a definition of that term. It gives the impression that potential consumers are covered and can complain to the Financial Ombudsman Service. However, as always, looking a little further along at the so-called small print, those potential customers must already have a relationship with the provider under complaint. In the case that was explained by my noble friend Lord Leigh, a speculative offer of a credit card does not constitute any relationship between, in this case, my noble friend and the consumer credit card company.

Nevertheless, we need to protect the consumer here, and the Financial Ombudsman Service is designed to be able to look into such matters. The aim is not to give redress to someone who did not lose out because they managed to spot the problem but to ensure that redress is available to prevent other consumers falling for the same problem and that action can be taken against a firm in anticipation of future problems that will inevitably arise—because not everybody will be able to spot the problem that my noble friend discovered in advance of any issues arising.

The idea of reporting to Action Fraud sounds, in theory, attractive. However, Action Fraud tends to be an information-gathering service; it cannot introduce any reforms. If one were to say, “I am calling you about something but have not suffered any loss”, it is unlikely, given the number of scams going on and the scale of complaints often received, that the matter would get any further, and certainly not in any timely manner. I therefore hope that my noble friend Lord True might satisfy us with some promises on looking further into this matter and taking it seriously. The Financial Ombudsman Service clearly recognises that it does not have the required powers, and there may well need to be some changes to the FCA handbook or the regulations behind it.

I was very much impressed with the arguments made on two other amendments in this group by the noble Baroness, Lady Meacher, and the right reverend Prelate the Bishop of St Albans, who clearly explained the importance of Amendment 16 on bailiffs treating customers fairly, not being quite as aggressive and having some controls, and Amendment 27 on introducing gambling blockers to help people avoid the terrible problems of losses accrued by gambling and the impact that it has on society. I hope that my noble friend Lord True will listen sympathetically on those issues. Interestingly, they revolve around trying to redress the balance between financial services providers and consumers. All too often, the provider may have more power than the ordinary consumer, who may unwittingly or sometimes innocently be caught up in problems that providers have been too heavy-handed with.

Finally, I should like to speak strongly in support of Amendment 37C, again so excellently and comprehensively explained by my noble friend Lord Young of Cookham, which addresses an issue that is the opposite way round. In this instance, providers would like to help their customers—in particular, parents of children with disabilities—to access money that otherwise would stay with that provider. The law is preventing that from happening in any timely fashion. We have an opportunity in this Bill to redress that problem, which has only just arisen and which, as my noble friend explained, was an oversight in the original legislation.

I was involved in some of the discussions on the introduction of the child trust fund, which aimed to help children have a capital sum by the time they reached age 18. All children born after 1 September 2002 received either £250 or £500 from the Government to be paid into a fund for maturity on their 18th birthday. Therefore, from September 2020, those first funds reached maturity. Many children up and down the country have been able to take that money. Unfortunately, we have a situation where, if the child is judged not to be sufficiently competent to manage their own money, their parent, who handles thousands of pounds for them in other ways, is unable to release that money.

Perhaps I may add a further example to that which was given by my noble friend Lord Young of Cookham. It is from a father called Andrew, whose son Mikey turned 18 last September and has a life-limiting condition. Andrew explains:

“We started saving money in his Child Trust Fund before we were aware that accessing it in the future would be a problem. We were encouraged and incentivised by the government to invest in a Child Trust Fund.”


The parents wanted,

“to use the money in the Child Trust Fund to purchase equipment and fund life experiences for Mikey, however, we cannot access the funds…Our time with Mikey is precious and we should not be having to spend time on this type of legal activity just to access money that ultimately belongs to Mikey.”

That sums up the problem we face.

I understand that we must be careful not to allow children with learning disabilities and disabled children to have money taken away from them under false pretences—there needs to be some protection. However, I pay tribute to my noble friend Lord Young, who has relentlessly pursued this issue time and again in your Lordships’ House through Oral and Written Questions, meetings and briefings. Perhaps my noble friend the Minister can give us some comfort that we might be able to introduce measures in the Bill such as those outlined in Amendment 37C—whether at Third Reading or in another place when the Bill goes back.

This would potentially be considered a financial application, and there are significant delays at the Court of Protection, which has understandably prioritised applications in favour of health and welfare. The problems facing the parents of these children need to be urgently addressed. Sadly, many of them have little time left with their children. This Financial Services Bill also has the support of the providers of these child trust funds. My noble friend is concerned about this issue and has generously given his time and expertise to try to help us understand the particular problems. He has suggested that the issue revolves around a legislative roadblock. If we can free up the roadblock within the Bill, we will be doing a great service to many disabled children.