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Stop taping our teams, says FSA

The FSA is warning it will take legal and enforcement action against firms that tape regulatory investigation visits.

It says taping staff is acceptable if they are aware it is happening but says covert recording is unacceptable. It says the practice undermines the effectiveness of monitoring visits and impedes open discussion between FSA staff.

The regulator claims that covert taping breaks its principle 11 which requires firms to deal with the FSA in an open and co-operative way and it adds that taping would raise serious questions about the integrity of individuals resp- onsible for the recording.

The alert, which has been posted on the FSA website, follows a story run in Money Marketing earlier this year which contained extracts from taped conversations between FSA field staff investigating an IFA’s complaint-handling procedure.

But the IFA at the centre of the controversy says FSA staff were on notice that they could be taped because a sign prominently displayed in his office warned that any conversations might be recorded. He says he made the recordings to protect himself against any mistakes made by the FSA team which could result in enforcement action against him.

Lawyers say recording conversations is legal if the party in question is given notice.

The IFA says: “I have no faith in the competence of the FSA and this was my insurance policy to make sure that they did not make a mistake which could put me out of business. The FSA should not be able to work secretly, they need to be held to account.”

But FSA spokesman Rob McIvor says: “If a firm is unh- appy with the behaviour of FSA staff, there is a formal complaint process but we object to covert recording of our staff.”

Aifa deputy director gen- eral Fay Goddard says: “In our view, this practice is unprofessional and I would question what this IFA was trying to achieve.”


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