Financial Services Authority turns proactive

Date: Friday 12 Mar 2010

The Financial Services Authority (FSA) is to begin a pro-active approach to root out mis-selling in the financial services market.

Chief executive Hector Sants outlined a new strategy, which the FSA said signals the end of ‘reactive regulation.’

‘The FSA waited for clear evidence that a product had been mis-sold and consumers harmed before it took action and relied principally on risk disclosure information at the point of sale to avoid mis-selling occurring,’ the FSA said.

Sants said it would now seek to improve market efficiency and fairness and to deliver intensive supervision of firms.

Tighter supervision will include mystery shopping and on-site visits. The FSA will also seek to secure tough action against firms and individuals who do transgress despite the tougher regime.

‘A successful consumer protection strategy must restore consumer confidence in the financial market place,’ Sants said.

‘A key element of restoring that confidence is that the consumer can trust the regulator. This strategy will restore trust in the regulator and will benefit everyone, consumers and providers.’

The Conservatives have vowed to abolish the FSA if they win the general election

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