Overview

The Financial Guidance and Claims Bill aims to improve consumer protection in the financial sector, particularly concerning pensions and claims management. Key changes include mandatory guidance referrals for pension transfers and benefit applications, restrictions on legal practitioner charges for Payment Protection Insurance (PPI) claims, and potential bans on unsolicited marketing of financial products.

Description

This bill makes several key amendments to existing financial legislation. Importantly, it mandates that trustees or managers of pension schemes must refer members seeking to transfer funds or begin benefit payments to appropriate pension guidance. This applies to both personal and occupational pension schemes across the UK.

Consumer Protection

The bill strengthens consumer protection by requiring a single financial guidance body to notify regulators about potentially harmful practices by regulated firms and to assess the impact of unsolicited marketing on consumers.

PPI Claims

The bill introduces an interim restriction on legal practitioners' charges for PPI claims, preventing excessive fees until new regulations are in place. This aims to protect consumers from exploitation during this period.

Unsolicited Marketing

The bill empowers the Secretary of State to create regulations banning unsolicited direct marketing of pensions and potentially other financial products and services.

Data Protection

The bill updates references to data protection legislation to reflect the latest Data Protection Act 2018.

Government Spending

The bill's financial impact is not directly stated within the provided amendments. The cost of implementing the new regulations and guidance will depend on the resources required by the government and regulatory bodies.

Groups Affected

The bill will impact several groups:

• Pension scheme members: Will be required to receive or opt out of receiving guidance before transferring or accessing their pension.
• Pension scheme trustees and managers: Will have new responsibilities to ensure members receive guidance.
• Legal practitioners handling PPI claims: Face restrictions on charges during an interim period.
• Financial institutions engaged in direct marketing: May face restrictions on unsolicited marketing of pensions and potentially other financial products.
• Consumers: Increased protection against potentially misleading financial advice and excessive charges.
• Regulators (FCA, Information Commissioner, OFCOM): Will have new or expanded responsibilities in enforcing the bill's provisions.

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