Watchdog pledges to stop scandals

ONE of Britain’s top financial regulators yesterday promised to take more decisive action to help prevent any further mis-selling scandals, writesJamesSalmon.

Martin Wheatley, who will become chief executive of the new Financial Conduct Authority from next year, outlined a tough approach to keep banks and other financial companies in check.

He said the FCA would use new powers to ban risky products and stop customers being misled.

The regulator will be able to bar firms from selling products for up to 12 months, without consulting them first.

‘All this will be delivered by a new culture in the FCA,’ said Wheatley. ‘We will encourage our staff to be more confident in making bold, firm and predictable decisions.’

Existing watchdog the Financial Services Authority, which will be disbanded next year, has been panned for being slow to respond to a series of mis-selling scandals, including payment protection insurance.

Wheatley said that ‘firms selling the right products, in the right way, to the right consumers have little to fear’.

Mike O’Connor, chief executive of Consumer Focus, said: ‘The test of the FCA will be whether it prevents toxic products such as PPI, mortgage endowments or split capital trusts in the future. Will it intervene early or will pressure from industry delay action?

‘A model where customers are ripped off, and then awarded compensation years afterwards, is expensive and wasteful and serves consumers badly.’