FSA forced to name mis-selling companies
A decision by the Information Commissioners Office (ICO) forcing the FSA to name 12 companies accused of misleading customers over charges on policies, will be appealed by the Authority.The decision relates to a 2001 investigation by the FSA into overcharges on endowment policies. As a result of the investigation the FSA identified the companies using inappropriate charges when selling endowment mortgages, although the FSA guaranteed not to name them.
Action was brought against the FSA under the Freedom of Information Act when they refused a request to disclose the names of the companies identified, citing three sections of the FoI Act.
The FSA did disclose that they had identified 12 companies that failed to clarify the LAUTRO charges used as an example did not reflect the actual charges of their products. They should have made it clear that higher premiums would need to be paid in order to meet the maturity figures intended.
Each of the companies voluntarily agreed to compensate their clients thus avoiding formal censure by the FSA
The decision notice issued by the ICO indicates that exemptions under two of the sections (section 31 law enforcement, section 44 statutory prohibition) do not apply. Although the Commissioner found that the exemption under section 43 (commercial interest) did apply he decided that “public interest in disclosing the information outweighs that of maintaining the exemption.”
The FSA are appealing against the decision and a spokesman said that the ICO decision “raises questions about aspects of our proportionate and risk-based approach to regulation and how we take action to protect consumers.”
