FSA too easy on banks, say consumers

Three-quarters of consumers believe the FSA failed to stand up to the banks in the run-up to the financial crisis and has not done enough to help consumers, according to Which?.

Its survey of more than 1,200 people showed that 82% feel the FSA needs more powers to force the banks to change, with just 36% thinking that the regulator has managed to ensure banks treat their customers fairly.

Nevertheless, 85% said that a financial regulator is needed, with more than three-quarters saying that banks cannot be trusted to regulated themselves.

Which? chief executive Peter Vicary-Smith gave evidence to the Treasury Select Committee on 2 November, saying that the creation of the new Financial Conduct Authority (FCA) offered a "once in a generation opportunity" to get regulation right.

He said: "People are crying out for a strong financial regulator that fights on their behalf.

"The FCA has the potential to stand up for consumers' interests, but it will need to be tough and proactive.

"The new regulator must act to stop commission driven sales, tackle poor products and should hand down fines and punishments that act as a real deterrent against bad practice by the banks."