A House of Lords committee on financial exclusion has been told that the Financial Conduct Authority (FCA) rules regarding customer fairness were too vague, and therefore practically unenforceable.

The House of Lords Committee on Financial Exclusion met on 1 October, chaired by Baroness Tyler of Enfield, and sought to investigate fairness to constumers and access to finance for low-income individuals.

Sue Lewis, chair of the Financial Services Consumer Panel told the committee that ‘treating customers fairly’ amounted to “principles not rules”, and were so vague as to be unenforceable by the FCA or investigated by the Financial Ombudsman.

The committee also heard from Damon Gibbons, director at the Centre for Responsible Credit, who argued that the FCA’s latest focus was ‘worrying’.

Gibbons argued that the FCA’s consultation on its mission focused on competition initiatives such as switching providers instead of consumer protections, which he stated were ineffective in expanding consumer credit options to those on low incomes.

Gibbons said: “[This is] more of an assertion and an article of faith by regulators in the UK that those approaches will work.”

Lewis argued that a lack of products that responded to the needs of low-income individuals led to problems of financial exclusion, and urged for “clarity across the board.”

Gibbons added that technology should focus on helping low-income people access credit rather than creating an increasing range of new products, and stated that fin-techs could play a role.

He also argued that rules on consumer affordability were unclear in the consumer credit industry, and urged for a more formal arrangement.

Gibbons said: “On affordability we have a real dog’s dinner. I don’t think that the industry is very clear on what affordability rules mean…I would hope that we get to something much more structural.”