FSA considers “naming and shaming”
by Gill Montia
Story link: FSA considers “naming and shaming”
The Financial Services Authority (FSA) is being urged to “name and shame” companies that breach its rules.
Whilst the authority prides itself on being open in its dealings, it is currently preparing a discussion paper on the merits of greater transparency.
However, the FSA’s managing director of retail markets, Clive Briault, has pointed out that the regulator operates under the Financial Services and Markets Act, which limits the level of its disclosure in certain areas.
Which? is one of a number of consumer groups calling on the FSA to change its approach.
According to Dominic Lindley, policy adviser at Which?: “We need more effective enforcement, the imposition of higher fines and greater use of naming and shaming”.
He believes that “if the FSA can hit companies’ reputations as well as their bottom line, it offers a strong incentive to comply with regulation”.
The National Consumer Council agrees, having last year urged the FSA to “unlock the power of reputation”.
Currently the FSA is appealing against two Freedom of Information rulings made by the Information Commissioner’s Office (ICO).
The ICO rulings involve 12 companies that used inappropriate charges when selling endowment mortgages and seven equity release providers which were investigated by the FSA.
The discussion paper on greater transparency will be published in early 2008.