FSA tells banks to treat customers fairly

Banks have been told by the financial watchdog to treat their customers fairly or face tougher regulation and enforcement.

10:45 24 November 2004

Banks have been told by the financial watchdog to treat their customers fairly or face tougher regulation and enforcement.

The warning was made by the Financial Services Authority's managing director of retail markets, Clive Briault.

The FSA is particularly concerned by sales incentives that encourage bank workers to sell customers services that may not be suitable. Poor complaints handling was also singled out for criticism in the speech.

"We remain concerned about the treatment of consumers of retail financial services, including in retail banking," Mr Briault stated.

"We see reward systems that incentivise sales forces and branch staff to deliver volume targets without any measurement of the suitability and the quality of those sales."

Mr Briault said the FSA would prefer to avoid "more intrusive regulation", but if banks failed to act then it would have no choice but to introduce "ever more detailed rules or tougher enforcement action".