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What happens when the Money Advice Service gets things wrong?

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



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Got a letter from the ASA over a complaint I made about the adverts!
    According to them the MAS adverts are not missleading. and they are taking no further action. Looks like we have another Quango that cannot tell cheese from butter. I despair.

  2. If the MAS is not responsible for the “advice” or “guidance” it provides then why would anyone use it at all?

    This is yet again a failure of our Government and Parliament for allowing this to happen.

    It also creates a valid argument that if Government (as the adverts say) can offer a service to consumers that is “unaccountable” for its advice then how and why should we be expected to be “accountable” to FSA rules ?

    Either all those giving advice or guidance are subject to the same rules or our Giovernment has lost all sensible credibility and remember they promised us in the Queens Speech , “fairness, responsibility and justice”. This is none of those.

  3. Go to the MAS website, and read their terms and conditions, amongst which you will find these:

    3. Disclaimer

    3.1 We try to ensure that the information on the Money Advice Service website is correct, but (except where indicated) we do not give any express or implied warranty as to its accuracy and completeness and we do not accept any liability for error or omission.

    3.3 We are not liable for any damages (including, without limitation, damages for loss of business or loss of profits) arising in contract, tort or otherwise from the use of or inability to use the Money Advice Service website, or any material contained in it, or from any action or decision taken as a result of using our website or any such material.

    .4 We make no warranty that defects will be corrected or that the Money Advice Service website or the server that makes it available are free of viruses or anything else which may be harmful or destructive.

    .5.1 We are not regulated by the Financial Services Authority. Accordingly, the information and interactive money planners provided are not regulated financial advice, nor can they take account of your own particular circumstances or recommend specific products for you.

    In my article, I gave one example of the MAS “advising” its consumers. “Advice” which is wholly unregulated, “advice” for which I have offered evidence that it is wrong, based on the principles established by the FSA and as ruled on by a High Court.

    I have since specifically drawn the article to the attention of the MAS. To date I have received no response following my approach, but will continue to monitor the MAS leaflet and website to see if they alter either. Perhaps, on the basis that they disclaim all and any liability for errors, and offer no warranty that defects will be corrected, they may just not bother making any changes – we shall see.

    However, let me end this post with this residual thought Re-read 3.1 above, the MAS do openly accept that errors and mistakes could arise.

    When any such error or mistake is brought to the attention of the MAS, who whilst still disclaiming liability seek to correct that mistake – can anyone tell me how exactly they trace, and inform, all those who have visited their web site, taken the “advice” offered, and acted upon it?

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