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Finance Bill could allow FSA to name and shame firms earlier

The FSA could be allowed to name and shame firms it is investigating if Parliament passes the current Financial Services Bill.

Currently the FSA refuses to identify firms under investigation until after the investigation had finished.

FSA managing director of supervision Jon Pain (pictured) told MPs at today’s Treasury select committee that the FSA could not name the firms being investigated over their arrears management processes but this could change if the Financial Services Bill passes through Parliament.

He said: “As part of the Financial Services Bill presently before Parliament, there are some provisions for changing that process.

“Clearly, we will wait to see what progress that bill makes. But if those provisions were adopted, that would change the process at the stage at which a firm would be identified as part of that enforcement process.”

Pain added that if the bill was not to pass through Parliament successfully, the FSA would “not then lose our endeavour of wanting to revisit it”.

Pain also told the committee that the FSA’s £2.8m fine of GMAC-RFC for failing its customers and the £7.7m it ordered the lender in redress to over 46,000 borrowers in October 2009 was to show that this type of behaviour would not be accepted.

He said: “We think it was very important to show that if firms did not treat consumers appropriately, then there were consequences. And these are the very stark consequences in not managing your arrears relationship with your consumers in a fair and even-handed way.”

FSA director of small firms and contact Lesley Titcomb, who was also a witness at the committee, said that there are currently seven firms being investigated for arrears handling by the FSA.

However, Council of Mortgage Lenders director general Michael Coogan told the committee that it is unfair to name firms in the investigation stage.

He said: “Innocent until proven guilty is still an important principle I think. I think it’s fair to the firms, in an environment where enforcement action can last for quite considerable time, that you don’t have uncertainty hanging over them by referring to them in public at one stage and having many months before a final decision is taken either way.”


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There are 11 comments at the moment, we would love to hear your opinion too.

  1. It is common law that persons are not guilty until proven otherwise. Once again the FSA want to overide basic rule of law and moral issues. If they name a company under investigation and it was found that the company was not guilty could they sue the FSA for compensation for any loss. If that was the case it would mean that fees would have to go up to cover the compensation. In addition it would put pressure on the FSA to find them guilty to save face.

  2. fsa are judge jury and executioner now so why not be guilty before being found innocent it will get rid of a few more good firms simples

  3. First step to financial services being fedralised. Marshall law has been, firms and individuals will soon be put to the sword, risk free financial serivces as all you will be able to buy is the B676 government federal Bond which invests in cash so its safer than safe, the country is a farce

  4. The power to act outside the law just gets stronger and stronger in the hands of the regulator.Whatever happened to the rule of law? We might as well live in some banana republic if an unelected, unanswerable quango is able to name & shame at the outset of an investigation, before the full facts have been established. What is going on in this country?
    Why are these self styled policemen allowed so much freedom to cause so much damage? What happens when the fsa fails to treat those it regulates appropriatly ? what consequences do they face?

  5. Having experience of dubious arrears handling by secondary lenders and seeing the effect this has had on a huge scale in the States, I am fully behind the FSA on this one.

  6. Never Too Old To Rock 23rd March 2010 at 3:57 pm

    ‘Every Breath You Take’—The Police

  7. Robert Donaldson 23rd March 2010 at 4:17 pm

    I wonder if Steve would be happy for them to name and shame him and then find out he is not guilty. Wrong wrong wrong

  8. A great deal of bleating is done in this regard. I cannot for the life of me understand how Roumania can get rid of a brutal regime and we in this country put up with this offensive and brutal regulator.
    Actually what is ‘simples’ is we have only the will to act for self, have no backbone and cohesion. We can all say NO but that is the rub isn’t it?

  9. The FSA is currently immune from both criminal and civil prosecution unless it can be proved that it has acted maliciously.

    If it insists on acting before there is proof that protection has to be removed

    Perhaps if individual FSA staff members can be sued that might make them more circumspect


  10. This smacks as another move towards the Big Brother attitude of Power gone mad:
    Bring on the Election and lets get rid of these idiots.

  11. The difficulty lies in separating ‘name’ and ‘shame’.

    It is actually quite usual for the identity of a person (or company) under investigation to be known before the conclusion of the process. There was little outcry in defence of MPs who were named while being investigated by the police, despite the ultimate decision in some cases not to pass the file to CPS. How often do we read of the arrest of a named person, and his subsequent release on bail pending further investigation? Do we always hear about the eventual decision not to prosecute, or the acquittal at trial?

    Being ‘named’ is embarassing and potentially damaging. However, it is arguably not wrong in principle to name the subjects of a significant investigation.

    However, it is important that FSA rigidly avoids ‘shaming’ – ie any conduct that could reasonably be understood as pre-judging the outcome. Such behaviour could conceivably give rise to legal action – even to contempt proceedings if the outcome of court proceedings was concerned.

    So the message is ‘Have your pound of flesh – but don’t you dare shed a drop of innocent blood!’

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