The regulator says it would only publish details of the worst-performing companies but the information would include how many complaints had been made, how long they took to resolve and the level of recompense.
The FSA is required by law to keep some information confidential but says it has the freedom to publish information in some areas that it is not currently making public. This could include naming more companies that it is investigating as well as highlighting those that have done well.
The proposals were revealed in a discussion paper on transparency last week and are part of the FSA’s move towards increasing the amount of information that it discloses.
The paper says: “We believe that where Parliament has given us the statutory powers to allow us to publish information and if publishing that information helps us achieve our objectives, then it is legitimate for us to do so.”
The watchdog believes that by releasing data on 400 companies, 99 per cent of reported complaints will be accounted for.
The regulator says releasing complaint data would allow consumers to better compare companies’ performance. FSA chief executive Hector Sants says: “We believe that transparency is an important regulatory tool and, as an organisation, are committed to being open and transparent. The discussion paper seeks to initiate debate on how we can better utilise transparency to achieve our regulatory aims and, in particular, proposes a code of practice.”
The FSA says it recognises that stakeholders hold strong and often polarised views on transparency, which is why it wants to initiate a “full and open debate” on the issue.
The industry has until August 29 to comment on the proposals.
The British Bankers’ Association says it is considering the issues raised in the paper and further thought is needed before any detailed comment can be made.
However, a spokesman says the feedback it has received so far from members suggests that the FSA must not substitute increased transparency for supervision.
He adds that any published information needs to be clear and accurately represented.
He says: “There is a difference between information and intelligence. Information is pure data, whereas intelligence is the interpretation of that data. It could be counter-productive if information is put into the public domain that can be misunderstood.”
IFA Defence Union founder and chairman Evan Owen believes the regulator should be more focused on developing proactive steps to stop the behaviour that causes complaints.
He says: “The regulator needs to stop poor practice from happening, not tell us about it after it has happened. There is no point in that. The FSA needs to listen to the advisers that are warning them about bad practices at the banks.”
He also considers that the FSA needs to be more transparent about its own practices before coming down hard on companies.
He says: “Transparency, like charity, should begin at home. If the FSA were more transparent itself, then it might have more right to expose others.”
Pinsent Masons lawyer Robin Ellison says, as a general rule, the FSA should disclose all complaint information to the public.
He adds that rather than damaging the reputation of companies, “naming and shaming” is beginning to be seen as a rite of passage.
He says: “If you look at the number of people that have been criticised in the past, it has actually become a badge of honour to be criticised by the FSA. It becomes just another part of business rather than a black mark.”
Informed Choice joint managing director Martin Bamford says if the FSA compiles a league table based on complaints, it should include information about the whole industry.
He says: “Data can be manipulated and it is difficult to interpret. If a league table is published, it should include everyone so that the information can be put into perspective.”
Bamford adds that there is no harm in transparency at the top levels. He says: “It would just demonstrate what we have known for a long time – that advice from IFAs is better than the sales practices of most banks.”