Members of Parliament have criticized the Financial Conduct Authority (FCA) for not adequately addressing a previous report that labeled the organization as ‘incompetent at best, dishonest at worst,’ amid demands for significant reforms.
The All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Finance presented its report to Parliament in November, having gathered evidence from 175 respondents, including whistleblowers, scam victims, and both current and former employees of the regulator.
In response to the criticisms, the FCA stated, “We strongly reject the characterization of the organization. We have learned from historic issues and transformed as an organization to better serve consumers, the market, and the wider economy.”
This response has frustrated parliamentarians, who are preparing a series of supplementary reports that include case studies on recent scandals such as Woodford, Wealthtek, Philips Trust Corporation, and Car Finance.
Bob Blackman, co-chairman of the APPG, remarked, “The FCA won’t be able to hide behind the claim that the issues raised are historic. New evidence received since our first report makes us unconvinced that true transformation has occurred at the regulator.”
Sam Rushworth, also co-chairman of the APPG, pointed out that the FCA’s leadership engages far more frequently with industry bodies than with consumer organizations. He stated, “For every one meeting with a consumer body, there are almost five with the industry. That ratio excludes all the meetings the FCA has with regulated firms, so the overall picture is even worse.”
He emphasized, “It’s doubtful that the consumer voice is being properly heard at the FCA, raising the question of whether the FCA, or another entity, should take on a sole pro-consumer role, similar to the USA’s Consumer Financial Protection Bureau, which is not hindered by conflicting interests like the FCA. Unlike the FCA, it is not pulled in multiple directions.”