The report looks at the roles of the Financial Conduct Authority (FCA), the Financial Ombudsman Service (FOS), the Financial Services Compensation Scheme (FSCS) and HM Treasury in the management of mis-selling cases, addressing both the administration of redress schemes and the regulatory responses and penalties imposed on firms.
The FCA welcomes the NAO report and accepts its findings.
The report recognises that the task of reducing mis-selling of financial services cost-effectively is a difficult one and we welcome the NAO’s conclusion that FCA action including thematic work, changes to inducements, increased fines and redress payments appear to have substantially reduced financial incentives for firms to mis-sell products.
It is unlikely that mis-selling could ever be eliminated completely. Our aim is to avoid and minimise it as far as possible, create the right incentives and culture in firms and to ensure appropriate redress for consumers and regulatory penalties for poor conduct are put in place when it occurs.
The report makes clear that the recommendations, which we are accepting, are designed to build on the FCA’s current strategy and increase confidence that it is achieving its intended outcomes for consumers. Protecting consumers from the effects of mis-selling is central to what we do.
The FCA statement and related documents can be found here.