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FCA not fit for purpose and should be reformed, claims consumer group

FCA not fit for purpose and should be reformed, claims consumer group

A consumer group has claimed that the Financial Conduct Authority “is not fit for purpose and should be replaced or reformed” to better protect consumers.

Transparency Task Force (TTF), a pro-consumer lobby group, said in an open letter to the FCA that it is failing in its regulatory oversight of the financial services sector.

The group will be holding a Rally for Better Financial Regulation next Tuesday (24 May) to demand more from the regulator.

The letter says: “We believe that the UK cannot have the financial sector it needs and deserves if the regulatory framework that governs it is poor.

“We believe that the FCA could, and should, be doing a much better job, particularly in relation to providing an appropriate degree of consumer protection.”

The main banner the TTF intend to use at the rally has these words: ‘The Rally for Better Financial Regulation, because the Financial Conduct Authority is not fit for purpose, and needs to be reformed, or replaced’.

The letter continued: “It is our firm belief that whilst the statements and inferences in the banner and placards are necessarily blunt and hard-hitting, they also accurately reflect the inevitable conclusions that any independent, objectively-minded and evidence-based person would come to, if he or she were to properly study the evidence that is available, which even includes testimony from existing and former FCA staff.

“Whilst we think there is a great deal wrong with the FCA, we do not believe the general staff are to blame at all. The overwhelming, vast majority of FCA employees are honest, ethical, and hard-working professionals doing the best job they can. Rather, we believe the FCA is ‘wrong at the top’.”

The FCA under Nikhil Rathi has promised to be proactive in ensuring that consumers are treated fairly and has introduced a raft of measures to that effect including a Consumer Duty regulation.

Rathi, who was appointed in 2020 to replace Andrew Bailey after he departed for the Bank of England governor role also pledged to focus on a more preventative approach to consumer harms.

But the consumer group claimed that little has changed since Rathi took over and that he needed to do more to bring about the much-desired transformation of the FCA.

“Indeed, in too many cases, the FCA under your leadership has failed to even acknowledge the existence of longstanding injustices and dysfunctions, let alone set out along the path toward fixing them.

“As per the dialogue that we have had since your appointment, the Transparency Task Force sees itself as a critical friend to the FCA and I do hope The Rally for Better Financial Regulation helps to articulate in no uncertain terms the scale of the remediation and transformation that we believe is necessary,” the group said.

The FCA declined to comment.


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