FSA to be more proactive on mis-selling

Date: Friday 12 Mar 2010

Financial products could be vetted before they are allowed to go on sale under new proposals unveiled by the Financial Services Authority.

The UK regulator says it intends to become more proactive to prevent potential mis-selling scandals in future rather than punishing and helping consumers get redress after the event.

The new approach will see it work closely with firms to pinpoint potential risks for consumers, while also increasing its mystery shopping activities where FSA staff trial products before they go on sale, which will also help it assess the marketing strategies for new products.

Hector Sants, the outgoing chief executive of the FSA, will give full details in a speech at Oxford today.

He hold the BBC this morning, "The FSA needs to step up our ability to see mis-selling before it has come too widespread, and that will require us to make more on site inspections both as FSA inspectors but also through mystery shopping where we pose as consumers."

"So I think we need to sample what is going on in the marketplace, get out there, get out in the field, be visible and not just wait until the consumers complain," he added

The Conservatives have vowed to scrap the FSA if they win the election.

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