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Which? way for FSA to get tough on the bad banks

After ignoring the concerns of the IFA community over banking advice for years, perhaps the weight of the Financial Ombudsman Service and consumer group Which? can spur the FSA to action.

Last week, Money Marketing revealed a warning from Which? over an increase in complaints it has received from elderly people about investment advice they have been given by banks.

Mirroring the recent concerns of the FOS, Which? says it has seen a rise in complaints from people who thought they were buying a low-risk savings product when, in fact, they were sold products where capital was at risk.

Which? says it will consider complaining to the FOS itself if it continues to receive large numbers of cases. It believes this could ultimately lead to an FSA investigation under the wider implications’ regime.

Complaints against bad bank advice are nothing new but the recent economic climate has seen this behaviour float to the surface.

In a low-interest-rate environment, evidence suggests bank advisers have been pushing customers who traditionally have only wanted savings accounts into more risky investment vehicles to chase extra revenue.

Judging by the comments of Which? and the FOS, as well as many IFAs who have been contacted by worried bank customers, a large number of these individuals were not aware of the risk they were taking on.

Once again, Money Marketing supports the call from the Association of IFAs for a proper FSA review into these matters. It would undermine every Government and FSA attempt to restore the public’s trust in financial services if the banks are allowed to get away with this.

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