Campaigner Gina Miller is urging MPs to suspend the Financial Conduct Authority’s (FCA) consultation to reform the compensation scheme for victims of financial loss until after its handling of the London Capital & Finance mini-bond scandal, among others, have been brought to light.
In a letter to the Treasury Select Committee, Miller and her husband Alan slammed the proposals put forward by the FCA as “intellectually dishonest, morally questionable and, from our understanding, contrary to law”.
The True and Fair Campaign co-founders took aim at the “truncated” eight-week consultation period, which contravenes the government’s Principles of Consultation code, and was held over the summer holidays during an “unprecedented pandemic”.
“It is scandalous that the FCA is once again acting in an anti-consumer manner by attempting to disadvantage victims of their own regulatory failings,” Miller said.
“Who could possibly have thought it sensible, after a litany of financial scandals, compounded by a global pandemic that has damaged financial services businesses and consumers alike, for the FCA to hold a consultation on its own performance in the depths of the summer holidays?”
Compensation capped at £10k
The Millers also claimed the FCA’s proposals reduce the scope for claims which unfairly disadvantages victims and would introduce a cap on compensation of £1,000 for victims who have experienced distress and inconveniences and £10,000 ($13,064, €11,075) for those who have experienced financial loss.
Over the last 18 months the City watchdog has paid out just £13,4752 to successful complaints over its own conduct, they noted.
Last year, 62 out of 63 reports published by the Complaints Commissioner involved the FCA, compared with just one for the Payment Systems Regulator and none for the Bank of England and Prudential Regulatory Authority.
But the biggest issue at stake is the fact the regulator‘s consultation is happening before the independent reviews of the HBOS Reading, London Capital & Finance and Connaught scandals are published, in a move that “appears calculated”.
“The fact that an underlying theme of the delay to both the Dobbs Review and the Gloster Review is the FCA dragging its feet and in the latter case, acting to delay the review by belatedly disclosing a further 3,500 documents that ‘should have been provided previously,’ stands in stark contrast to the FCA’s desire to quietly and quickly conduct this Compensation Scheme Consultation.”
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