The FSA has been granted a new power to deliver redress for consumers. The new power was part of April’s Financial Services Act 2010, and has been activated by a Commencement Order laid in Parliament by HM Treasury
FSA has said of the new power:
“This is an important new tool for the FSA, which increases our ability to get redress for consumers when firms have not followed our rules. The power would obviously be used proportionately. It is not a substitute for working with industry where there is potential to bring an issue to a fair and speedy conclusion.
The FSA will, however, seek to use this power where necessary to ensure consumers are fairly treated.
The new power would be used in instances where there is evidence of widespread or regular failings that have caused consumer detriment. It is a rule making power, so the FSA must undertake cost-benefit analysis and consult each time it wants to establish a redress scheme”.