Consumer group Which? is among four organisations awarded ‘super-complainant' status by the government, meaning it has the power to present complaints to the Financial Conduct Authority (FCA), which must respond.
The Consumer Council Northern Ireland, Citizens Advice and The Federation of Small Businesses complete the list of the first consumer representative bodies to be given the status. It is the first time business groups have been included.
They have the power to present complaints to the FCA if they believe there are features of a financial services market that are, or could be, significantly damaging the interests of consumers. The FCA must respond within 90 days.
The procedure for super-complaints to the FCA was brought in by the Financial Services Act 2012, to strengthen the voice of consumers of financial services.
In the past, super-complaints about financial services could only be made to the Office of Fair Trading, which does not have the same powers as the FCA in relation to financial services. Now the FCA, after receiving a super-complaint could, if appropriate, use its own powers to tackle any underlying issues identified as a result of a super-complaint.
For example, if the FCA agrees with the super-complainant that there is a significant problem, it could restrict financial services businesses from carrying out certain activities, make new rules to require firms to do things differently, take enforcement action, or launch a consumer redress scheme to put things right for consumers who have suffered detriment.
The FCA might do this on the basis of the evidence presented, or may need to carry out its own investigation first.
Financial secretary to the Treasury Sajid Javid said: "The government is determined to create a financial services sector that serves the needs of customers rather than the other way round. It is vital that consumers, including small and medium-sized businesses, have a stronger voice to raise issues when they feel specific markets are not working as they should.
"Super-complainants have an important role, and coupled with the strong remit of the Financial Conduct Authority to protect consumers, these measures are a significant step in our drive to tackle bad practice in the financial services sector ever more rapidly and robustly."
Which? executive director Richard Lloyd added: "Giving consumer groups like Which? the power to bring super complaints in financial services means we can prompt early action by the regulator and help prevent scandals and mis-selling before they get out of control.
"For too long, consumers have suffered from a series of financial scandals. That's why we need the regulator to proactively monitor the market, respond to evidence from consumers and take tough action against bad practice."
Annuity market worth £4bn in 2017
Oversees £30bn of advised and D2C assets
£1bn business since inception
Considered doing so in 2015
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