In its annual report, the body that ensures the Financial Services Authority (FSA) regulates the financial services industry in the interest of consumers has said firms which do not treat customers fairly must have strong action taken against them.
In its 2008-09 report, the Financial Services Consumer Panel said the FSA must heavily penalise businesses that do not treat consumers fairly, particularly in relation to mortgage arrears.
Stronger action, it said, would make bending the rules much more risky.
The group also called for the FSA to make sure that banks commit to fair treatment of their customers, while eliminating sales bias from investment advice was also recommended.
"The FSA's Retail Distribution Review must result in a step change in the market that consumers deserve. That means the abolition of sales, product and provider bias, and the raising of professional standards across the board," it said.
The issue of transparency was also central to the panel's report, as it called for the FSA to give more feedback on firms' performance so it is clear to consumers and shareholders how businesses are behaving. It labelled the FSA's recent pledge on the publication of complaints data as 'a step in the right direction.'
Chairman of the panel, Adam Phillips, said the consumers are bearing the cost of the financial difficulties.
"It is essential to maintain the stability of the financial system, but the FSA also has a statutory objective of consumer protection. It must rise to the challenge of ensuring that the financial services industry really does treat its customers fairly," he commented.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.