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Last Updated: Wednesday, 7 November 2007, 14:58 GMT
Regulator must 'name and shame'
The entrance to the Financial Services Authority
The FSA is appealing against two Freedom of Information decisions
Consumer groups are calling on the Financial Services Authority (FSA) to "name and shame" companies that breach its rules.

The City regulator is preparing to publish a discussion paper on the merits of greater transparency.

The FSA has been criticised for not identifying firms which put out misleading adverts, or perform badly in mystery shopping exercises.

But it insists it is already an "open and transparent regulator".

We need more effective enforcement, the imposition of higher fines and greater use of naming and shaming
Dominic Lindley, Which

Addressing an FSA conference about treating customers fairly, the FSA's managing director of retail markets, Clive Briault, said the regulator would publish a discussion paper on the "purpose and possible effects of greater transparency" early next year.

He insisted the watchdog was "open and transparent", and already published a lot of material about its approach to regulation and its work.

But he pointed out that the FSA operated under a strict legal framework - the Financial Services and Markets Act - which prohibited the disclosure of certain information.

Public interest

Dominic Lindley, policy adviser at consumer body Which?, called on the FSA to change its approach.

"We think additional transparency is essential," he said. "Keeping things secret doesn't help the consumer."

"We need more effective enforcement, the imposition of higher fines and greater use of naming and shaming. If the FSA can hit companies' reputations as well as their bottom line, it offers a strong incentive to comply with regulation".

Information is a powerful tool in consumers' hands
National Consumer Council

His appeal was echoed by the National Consumer Council (NCC), which last year urged the FSA to "unlock the power of reputation" to help markets work more effectively.

It welcomed the FSA's commitment to bring forward proposals exploring the possibility of greater transparency.

"As a matter of principle, consumers have a right to know whether or not firms comply with the rules and treat customers fairly," said an NCC spokesman.

"Regulators hold much information that would equip people to make better decisions. We hope the FSA's discussions lead to speedy action - information is a powerful tool in consumers' hands," she added.

Naming ordered

The FSA is currently appealing against two Freedom of Information rulings made by the Information Commissioner's Office (ICO) in August.

The ICO ordered the naming of 12 companies which the FSA says used inappropriate charges when selling endowment mortgages, and seven other firms which were investigated after failing an equity release mystery shopping exercise.

The FSA confirmed that the discussion paper on greater transparency would be published early next year, but a spokesman said it was to early to speculate about whether it could lead to greater naming and shaming.

He denied that it was a direct response to the ICO rulings.

UK secrecy laws facing shake-up
25 Oct 07 |  UK Politics
Call to open up public data use
08 Jun 07 |  Technology

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