FSA mystery shopping again exposes problems in financial services selling

30 March

Today's publication by the FSA of a letter to Chief Executives on the lack of compliance with new rules on the disclosure of information to consumers highlights another worrying example of problems in the selling of financial services, said the Chairman of the Financial Services Consumer Panel, John Howard.

John Howard added:

"We have always been of the view that the FSA cannot rely on returns from firms and occasional inspection visits to regulate successfully. Mystery shopping enables the FSA to see exactly what customers are experiencing and so far it has not been a pretty sight. Along with results into the selling of equity release, payment protection insurance and self certification mortgages, this latest work shows that the consumer experience is falling woefully below what it should. Surely by now senior executives understand that firms must comply with FSA rules, but this doesn’t seem to be getting through to their staff in the high street.

We are now keen to see that the FSA follows up the weaknesses exposed in all these areas and does more than just write to the Chief Executives of the regulated firms. We would like to see rigorous and robust action from the FSA in finding out why these new rules are not being complied with, and then dealing with firms by enforcement action if they are shown to have systemic problems in the way they are selling to consumers. We have asked the FSA to update the Consumer Panel regularly on this work and we will be monitoring progress closely."

Notes to editors

1. The FSA has today issued a press release and the letter which they have sent to Chief Executives of the relevant regulated firms. FSA
   

2. The FSA established the independent Financial Services Consumer Panel in December 1998 to advise its Board on the interests and concerns of consumers and to report on the FSA’s performance in meeting its objectives. The Consumer Panel has statutory status.
   

3. The emphasis of the Panel’s work is on activities that are regulated by the FSA, although it may also look at the impact on consumers of activities outside but related to the FSA’s remit. More information about the Panel's work is available on this website.
   

4. The Consumer Panel brings together a wide range of relevant experience. This includes financial services regulation, working with vulnerable consumers, consumer protection, consumer education, front-line money advice, legal expertise, competition policy, public policy analysis, market research and media.
   

5. There are currently eleven members of the Panel as listed below (for further information on individual members, see the Panel's website).

   John Howard (Chairman)
   Adam Phillips (Vice Chairman)
   Caroline Gardner
   Harriet Hall
   Tony Hetherington
   Stephen Locke

   Nick Lord
   David Metz
   Paul Salvidge
   Robert Skinner
   Carol Stewart