The Financial Services Authority (FSA) is establishing a consultative group to tighten up on marketing standards and the treatment of consumers in the financial services industry.
The decision follows publication of a report by the regulator this week entitled Treating Customers Fairly – Progress and Next Steps, which says more needs to be done to ensure customers are treated fairly by the industry.
The FSA is warning senior management that companies must do more to address their marketing and promotions, product design and sales processes to ensure they meet the regulatory requirement of treating customers fairly.
Publication of the report comes ahead of a damning report by the Treasury Select Committee called Restoring Confidence in Long-term Savings”, which claims that financial services companies are incapable of restoring consumers’ trust. The committee is recalling the heads of UK banks to explain why they have not done more to clean up the marketing of credit cards.
The reports have been welcomed by consumer groups. Consumers’ Association principal policy adviser Mick McAteer says: “Much of the financial services industry is not focussed on the consumer. The industry is not capable of solving the savings crisis on its own.”
Trade bodies the Association of British Insurers and the British Banking Association have reacted cautiously to the two reports and are consulting their members.