FSA Bends in The Wind
The Financial Services Authority (FSA), has given discounts of £4M on fines imposed on banks, building societies, mortgage firms and stockbrokers over the past year.
The firms (eg Nationwide, Capital One and Norwich Union) had been found guilty of serious rule breaches ranging from mis-selling of payment protection insurance (PPI) to failing to adequately safeguard the personal details of customers.
The discounts offered are in the region of 30%, in return for promising to co-operate and not challenging the FSA's findings at tribunal.
Which? is far from impressed, and accuses the FSA of "putting the interests of the industry over those of consumers".
The FSA has decided to bend in the wind as a result of the fight it had with Legal & General in 2005, over its endowments mis-selling case.
L&G successfully appealed against the size of the fine imposed on it.
The FSA is showing excessive weakness, it neglects the fact that were a firm to complain about the size of a fine it would receive an enormous amount of negative publicity during the tribunal.
By offering such large discounts, the FSA has let the insurance and banking industry have its cake and eat it.