Financial Services Authority chairman Callum McCarthy has attacked the banking industry, claiming there is evidence of irresponsible behaviour towards customers.
The FSA, he says, has dished out fines and compensation requests of more than &£255m over the past year, and suggests the corresponding damage to brands is even greater.
Speaking to the British Bankers Association, McCarthy described the present situation as “far removed from ideal”, saying products were needlessly complex, consumers were ill-equipped to understand them, and that sales forces were irresponsible and driven by incentives.
“There is clear evidence of too many companies being insufficiently concerned about their responsibilities towards those who purchase their products,” said McCarthy. “It is not in your interest that the value of your franchise and your brand should be eroded as the result of failure to treat customers properly.” McCarthy’s predecessor Sir Howard Davies took a similar tone in July this year when he criticised the marketing practices of the financial services industry (MW July 24).
A spokesman for Barclays says: “We agree that the selling of financial services should be done in a responsible manner and this is what we strive to do.”
Lloyds TSB, Abbey, Halifax Bank of Scotland and Royal Bank of Scotland declined to comment.