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FSA in pledge to crack down on misselling by bank salesforces

The FSA is pledging to come down hard on banks which fail to bring in controls to end misselling to customers who lack adequate financial product knowledge.

Chairman Callum McCarthy warned delegates at the annual British Bankers&#39 Association conference in London this week that the FSA would exercise its enforcement powers in a bid to stamp out the often encouraged irresponsible actions of salesforces.

He said it was up to the banks&#39 senior management to scrap incentives which prompt salesforces to behave in a way that can lead to customers being sold inappropriate financial products.

McCarthy stressed the importance of banks&#39 management ensuring that salesforces understand a customer&#39s needs, that internal controls are put in place and that incentives reward rather than discourage responsible behaviour.

He said these basic requirements had too often not been met, which not only harmed consumers but also dented the reputation of the financial services industry.

McCarthy insisted that the FSA would place a new emphasis on the way that banks treat customers.

He said: “What we can do, and what you must expect us to do, is to seek ways of rewarding those firms which behave responsibly and of making it increasingly costly for those who do not. When companies fail to meet their obligations, we shall use our enforcement powers actively.”

Barclays spokesman Andrew McDougall says: “We agree totally. It is both in our interests and the customer&#39s to sell products in a responsible manner.”

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