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Warning for IFA ‘mystery shopping’ regulator

The FSA has threatened an IFA with enforcement action for recording phone calls with its staff and posting them on the internet.

Mortgage Life & Pensions managing director Paolo Standerwick says he wants to turn the tables on the FSA by “mystery shopping” its staff.

But the regulator has sent a written warning to Standerwick, claiming “covert” taping breaches principles 4 and 11 of FSA rules which require firms to deal with the regulator in an open and co-operative way. It says it could be a criminal offence, breaching section 348 of the Financial Services and Markets Act which states confidential information can only be disclosed for certain purposes.

Standerwick refuses to back down, saying it is standard procedure to record phone conversations.

The FSA warned last year it would not tolerate recording after one of its investigation teams was taped by an adviser.

The FSA says: “We will seriously consider taking enforcement action against firms or individuals who record and disseminate communications from the FSA without our knowledge.”

Standerwick says: “If the act of recording and disclosure is in breach of any Act, then the FSA stands guilty as accused. My actions mirror those actions the FSA regularly takes with its own covert policies.”

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