At the end of July it emerged that the FCA would not be taking legal action against RBS. This in spite of the report it published five months ago concerning the poor and “systematic and widespread inappropriate treatment” of small business customers by the bank. This has harmed the FCA’s credibility, with one commentator labelling the agency “a paper tiger”.
Nonetheless there are signs the FCA is working to avoid similar problems in the future. Evidence comes from Samantha Seaton, CEO of Moneyhub, who commented: “It’s welcome news that the FCA has opened a consultation to improve conduct standards and communications in the payment services and e-money sectors. Innovation in our sector is held back by the opaque, complex marketing of products that leaves people unaware of the fees and charges they can be liable for, with lasting impact on trust in financial services.
“The advent of Open Banking at the start of this year will have a significant impact by putting consumers back in control of their data, but the initiative can only be successful if providers and app developers alike are transparent from the get go. Unfortunately, we are already seeing some apps that, while free at point of download, sell on users’ data or make money from commissions on recommended products. We need to ensure that the opportunity we have to empower consumers is not lost with it, vital payment services and e-money firms are up front with consumers in how they’re using their data.”
Although this does constitute positive news for UK consumers, there is a concern that, like in the RBS case, the FCA may lack the power of enforcement required to force providers and app developers to abide to certain conduct and communications standards.