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Nearly 11,000 complaints cost FSA thousands in compensation
by Sarah Miloudi on Feb 19, 2013 at 08:09
Nearly 11,000 complaints have been filed against the Financial Services Authority (FSA) since 2006 – forcing the regulator to pay out thousands of pounds in compensation.
A total of £53,600 has been paid out since 2006 by the FSA in ex gratia awards – payments without admission of liability – after the watchdog investigated allegations made against it by consumers and firms.
According to figures seen by Wealth Manager following a Freedom of Information request, the FSA said it received 378 complaints during its 2006/07 financial year, plus a further 837 that fell outside its remit.
It saw a spike in complaints in the wake of the financial crisis, with claims totalling 2,787 in 2008/09 and 2,336 in 2009/10. Consumers and firms were compensated heavily as a result, with a total of £29,615 paid out in ex gratia awards over the two years.
Under the Financial Services and Markets Act, the FSA is legally bound to investigate all complaints against it. According to the FSA’s annual report, it will refer these on to the Independent Complaints Commissioner only if they cannot be resolved in-house.
Between 2006 and 2012, the FSA received 10,875 complaints.
Typically, those from regulated firms related to mandatory electronic reporting, though sometimes they fell outside the scope of the FSA’s complaints scheme and were linked to the actions of the Financial Ombudsman Service or Financial Services Compensation Scheme.
Complaints about the FSA’s supervision of firms were also lodged.
After the financial crisis, the regulator highlighted a trend of complaints ‘thematic in nature relating to a variety of areas, for example, the ban on short selling and certain high profile enforcement cases’.
Not all of these fell within the boundaries of the FSA’s complaints scheme, however, and where ex gratia awards were made, the FSA said it was not required to disclose the reasons for the payments.
The FSA declined to comment.
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