Regulators have not yet got to grips with how to close down crooks, warns TTF
The Transparency Task Force (TTF) has questioned whether the Financial Conduct Authority (FCA) is “fit for purpose” following years of concern relating to the manner in which it exercises its investigative powers.
The campaign group's symposium yesterday (2 September) considered whether the FCA, the Bank of England, and the Prudential Regulation Authority are "rushing to minimise complaints and compensation for their failings" rather than competently investigating complaints relating to financial advice, pensions, and investments.
This follows the launch of the regulators' and bank's joint consultation earlier this year on potential changes to seeking compensation should a regulator's conduct have led an individual to financial loss.
Speaking at the campaign group's symposium yesterday (2 September), founding chairman Andy Agathangelou said the consultation had gone unnoticed over summer and added large regulators "will always have flaws and have scope for improvement".
"Strategically we really do need regulators to do all they possibly can to serve society, first and foremost, and that's what we can try to encourage to happen," he said.
"Our attitude of mine is to be constructively critical. Yes, critical, but always constructively critical. We're not about just pointing out problems and leaving it at that. We want to point out what we think the problems are. We also want to suggest real practical options that could be implemented to try to fix things."
Agathangelou said that a trend of cases going un-investigated or under-investigated was continuing to rise, specifically noting the prevalence of pension scams since the start of the coronavirus pandemic.
Earlier this summer, the Work and Pensions Committee (WPC) confirmed that it will investigate pension scams as part of a three-part inquiry into the protection of pension savers, the call for input on which closes next week. Recent figures from ActionFraud showed the number of pension-specific financial scams has skyrocketed since the Covid-19 lockdown began across the UK.
Over 11,000 coronavirus-themed scams have been reported, along with £5.1m worth of losses.
Agathangelou said: "We - the TTF - are now doing all we can to draw attention to [the compensation consultation] so that everybody that could and should respond does; we very quickly realised the significance of the consultation and we very quickly responded. We also want to draw other people's attention to it as well."
Agathangelou also backed a call from symposium attendees to lobby for a Royal Commission into the financial services sector in the UK and its governance and noted the effectiveness of The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in Australia between 2017 and 2019.
Commenting on the discussions of the symposium, the FCA said: "We are currently in the process of seeking views on proposals to improve the transparency of the scheme, which will include our approach to ex-gratia compensatory payments.
"This is a complex issue, which we have been in discussions with the complaints commissioner about for some time. We will take comments into account when we finalise our proposals."
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