Judging a persons’ credibility as an effective consumer protection advocate is less a matter of subjective opinion, but a matter of considering achievements. In the absence of achievement then one is left with assessing credibility based on actions, views and espoused beliefs. In my opinion, Brendan is genuinely committed to consumer advocay and has made a strong personal contribution in certain consumer protection areas, far more than many others including many posting here and elsewhere.
But does this make him an expert consumer advocate on financial service consumer protection including consumer indebtedness?
Many of his views and actions are not what I would consider to be representative of someone who truly appreciates consumer protection theory, principles and practical application or understanding of personal insolvency principles and practice.
My view is Brendan at times appears to demonstrate an ambiguity from attempting to reconcile conflicting shareholder, prudential regulatory and consumer advocacy values and principles. Seeing the world through the lens of a sophisticated investor, it’s an advocacy which appears at times to lean towards banking rather than consumer interests.
For example in his submission on personal debt he mixes home mortgage indebtedness with other debts. The use of extreme examples to highlight a hypothetical potential for financial planning abuse ignored the real practical intent of the principles and values underpinning personal insolvency regimes and earned debt forgiveness which is to provide a financial safety net for hopelessly indebted ordinary people whilst limiting the economic and social costs to society. It was not a submission one would expect to read of a consumer protection advocate as it echoes a pro-creditor Dickensian concern for moral hazard.
In 2002 in a submission on the formation of IFRSA in relation to its consultative panels Brendan wrote:
“Rather than enshrine a Consumer Panel and an Industry Panel in legislation, the legislation should provide for (unspecified) panels to be set up to represent Consumer and Industry interests. A single panel will achieve more than two separate panels. It is wrongly assumed that the interests of industry and consumers are diametrically opposed. On most issues, a very broad level of agreement would be reached. ” (my italics)
This confusion between what are regarded as distinctly differing prudential regulatory and consumer protection mandates seems to be at the heart of an ambiguity which at times leans more towards banking issues rather than consumer concerns. Or to put it in another way consumer interests are reflected through the lens of a finance professionals' and investors' concern with banking profitability and shareholder value. One that appears to believe the rational consumer actually exists.
The belief in the rational consumer is at the heart of the prudential regulators approach to consumer protection as a form of meta regulation and is not one shared by independent consumer protection agencies or leading academics. Furthermore the shareholder value view which is aligned with prudential regulatory concern for banking profitability frequently conflicts with consumer protection and is not one that is easily reconciled.
Another ambiguity is seen in references to home mortgages being as a form of savings and investment recommendation to first time house buyers to use interest only finance and risk over borrowing. From a consumer protection perspective this would increase the risk of financial vulnerability in what was a credit fuelled property bubble. From a professional investors perspective that considers homes as savings vehicles and tradable financial assets it may constitute fair advice. But few if any consumer protection advocates would ever agree that family homes should be considered are either savings vehicles or tradable financial assets. This treatment of the home as tradable financial asset was central to the abusive marketing of credit both here and in the US. It is not the view of consumer protection advocates who act to guard against the abusive behavioural manipulation of consumers use of credit by banks. It is why many consumer protection advocates, agencies and academics believe consumer protection should include consumer product regulation, particularly credit products.
Being an effective communicator or moderating a website doesn't mean one is expert rather one has an informed opinion and views which may be conflicted and ambiguous. In my opinion Brendan appears to be conflicted and ambiguous. My opinion is this ambiguity concerning prudential regulation, consumer protection, a professional investor status together with stated opinions, recommendations, advice and public actions are at a remove from someone who appreciates and singularly espouses consumer protection theory, its principles and practices.
I have written of the imbalance of the task group which does not include representation of professional consumer advocates with credible professional expertise in consumer indebtedness and consumer protection such as MABS and the NCA. The exclusion is telling. I should hope it’s not the case that indebted consumer interests will be claimed to have been fully, appropriately and expertly included for in the current group.
