Mis-selling of financial services products, which may involve providing customers with misleading information or recommending that they purchase unsuitable products, can cause serious harm. It has occurred across many different product areas, including bank accounts, consumer loans and insurance.
Financial services institutions have paid over £18 billion in compensation to purchasers of payment protection insurance following regulatory action; the Financial Services Authority said that "stronger action sooner could have limited the growth of the problem".
National Audit Office report
The National Audit Office have conducted a study to consider how well the Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme work together to detect problems and secure redress for consumers. It looks at how the Financial Conduct Authority regulates financial services institutions to counter mis-selling. It will also examine whether the regulatory regime provides the right incentives to deter mis-selling, and how it identifies and responds to mis-selling risks.