By Robert Adungo

Credit card providers could be placed under greater scrutiny in the future if the new Financial Conduct Authority (FCA) is given full responsibility for the regulation of retail financial services, including consumer credit.

The FCA will replace the Financial Services Authority (FSA) as the industry's watchdog once the Financial Services Bill is enacted and the Financial Services Consumer Panel (FSCP) is keen to ensure the new body has greater responsibility.

It has called for consumer credit regulation to be transferred from the Office of Fair Trading (OFT) to the FCA, arguing that priority should be given to preserving existing consumer protection mechanisms.

According to Adam Phillips, chair of the Consumer Panel, the organisation would like to see "common sense" being applied to any reform in the sector to ensure consumer protection is enhanced.

"Consumers would be surprised to learn that the FSA regulates the notification of an unauthorised overdraft and the grounds on which payments may be bounced, but not the overdraft itself, which is regulated by the Office of Fair Trading," he states.

"Transferring the Consumer Credit Act powers to the FCA will make retail financial services regulation work in the way most people expect. In the circumstances, it's not surprising that banks have been able to profit from the resulting confusion."

Results of a consultation on how consumer credit should be regulated, which was carried out by the Treasury and the Department for Business and Skills, are due to be announced shortly and will outline clearly how the body will carry out its work.