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Friday, November 10, 2006

Financial Services Authority Heavily Criticised

The Treasury committee has criticised the Financial Services Authority's (FSA) regulation of financial advertising, and said that the FSA should copy the policy of the Advertising Standards Authority (ASA) and make its findings public.

Committee chairman John McFall MP has written to the FSA chairman, Sir Callum McCarthy, complaining about its methods.

The FSA said:

"As a regulator we have a formal procedure we have to go through - we can't just issue a formal censure of a firm."

In contrast, the ASA publishes its rulings on its web site.

McFall said that the financial regulator should follow suit:

"The FSA has, at the moment, a seemingly far less transparent system in regard to financial advertisements, with no publication of complaints, and little public record of which companies have broken the rules.

This means consumers seem to get a worse deal, with the FSA offering no public scrutiny and little incentive for advertisers to keep to the rules.

The FSA needs to take a far more robust approach by highlighting poor practice
."

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