Many have already questioned whether MAS is masquerading under an entirely spurious flag emblazoned “advice”. However few have yet asked about its existence as a monopoly whatever its name. What dangers does that hold when compared with our long established understanding of the need for competitive markets and the avoidance of monopolies?
And what happens when MAS provides “advice” which is incorrect? Given its establishment as THE source of money “advice”, who pays for any losses they might incur and to whom do they complain?
This early in MAS’ existence, you might say such questions are hypothetical. You would be wrong.
The recent High Court ruling in favour of the FSA and the FOS and against the British Bankers’ Association established a precedent, not appealed by the BBA, over the implications of S150 of the FSMA.
S150 of the FSMA, and that High Court ruling, may not be a must read for many. It seems that MAS may clearly be amongst that number. In consequence its “advice” to its consumers is wrong.
The evidence? This is an extract which currently appears on the MAS website and in the MAS leaflet “Making a complaint” – “ … You can choose whether or not to accept the Financial Ombudsman Service decision. If you accept the decision, it is binding on both you and the firm. If you don’t accept it, you can take the case to court.” Note that last sentence, please.
In brief, S150 of the FSMA addresses contraventions of the FSA rules – making them actionable as a breach of statutory duty. In simple terms, the matter under dispute can be taken to a court.
However, as was strongly argued over in that Judicial Review, there is an exception, a very important one.
S150 (2) completely removes that ability to take the matter to court. The FSA long ago decided that S150 does not apply to the principles that the FSA have established, such as Treating Customers Fairly. You cannot go to court to resolve such issues.
Despite those implications, despite that major caveat, no mention, no warning of that restriction is included in the “advice” given by MAS. No mention, no warning despite that FSA decision, nor the evidence argued over in that Judicial Review.
So this early in the existence of MAS, it is highly pertinent to ask the questions listed above. As a disclaimer on its website makes clear, MAS takes no responsibility for the “advice” it gives.
Perhaps you believe the MAS will never get anything else wrong, or that its existence as a monopoly holds no dangers. My example may just be a one off. On the other hand perhaps our historic understanding of the need for competition and for plurality are not wrong.
Mike Fenwick is an industry consultant