Sleepy financial watchdog needs to get tougher

THE PUBLIC rightly expects regulators to supervise their specified area and enforce efficiently and appropriately. After years of failure with many investors losing money, the Financial Services Authority was wound up.

Its successor, the Financial Conduct Authority (FCA) was founded on All Fools’ Day 2013. High hopes were expected with many echoing Edmund Burke’s quip that: “Good order is the foundation of all good things.”

Yet it has proved to be as catatonic as its predecessor. It has responsibility for regulating financial services provided by 59,000 companies. Whether it is savings for a child, an ISA or pension, a loan or direct debit, a credit card or an investment, the FCA should be regulating it.

Its action – or more appropriately its inaction – affects everyone. Internet scams form an obvious example.

The FCA does not make this a priority and even after the more diligent public draws clear breaches of the regulations to its attention, no action is taken for months.

It has produced a scams register which can be checked to see if an investment opportunity is listed but is not kept up to date. The FCA’s own staff should have found the miscreants. It is not short of money as fees are charged to financial service firms.

When a company offers a product that promises to pay massively more than the going rate, it should raise anyone’s antennae.

The sale of minibonds forms a second glaring lack of action by the FCA. Both Blackmore and London & Capital Finance offered returns of around eight per cent over five years. This was over four times the interest rate paid by banks.

The report of an independent inquiry into how 11,625 investors were defrauded of £237m was to be published on July 10. The