Financial providers that don’t abide by financial regulations face tougher fines and prison, the Financial Services Authority has warned.
Hector Sants, the City regulator’s chief executive, believes that companies have not demonstrated that they have changed. He said that firms had failed to accept ‘collective responsibility’ for the financial crisis and promised that harsh penalties will be levied on companies that transgress in the future.
The FSA has increased the pressure on wayward firms, imposing £27.3m of fines in 2008-09, including taking action against providers that committed fraud or mis-sold products such as payment protection insurance (PPI) or endowment policies. Almost £20m of penalties have been levied so far this year.
Prison looms for rotten firms
Mr Sants said: ‘I have made it clear that when firms do not adjust their behaviour they can expect tough action from the FSA, either to require them to do so, or when that is not possible, to require them to mitigate risks their actions have created. And yes, that does mean people go to jail.’
Which? money expert Dan Moore said: ‘Firms that act fraudulently and otherwise let down their customers deserve the harshest penalties. There is no excuse for continuing to mis-sell financial products and otherwise act against the best interests of consumers.’
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