On 24 February 2016, the National Audit Office (NAO) published a report on the effectiveness of the current system of redress for misselling complaints, for which the FCA has primary responsibility.
The NAO’s key findings were that:
- the FCA’s strategic approach to managing interventions in relation to mis-selling is still evolving;
- increased fines appear to have “substantially reduced” the financial incentives for firms to mis-sell products; but
- the FCA lacks good evidence as to whether its actions are reducing the overall level of mis-selling.
The NAO concluded that the redress system has “increased the prominence of mis-selling in financial services firms”, but that “the FCA’s strategic overview … makes it harder to respond effectively when problems emerge”