The U.K.’s Financial Services Authority said unfair mortgage contracts and funds traded on exchanges are among the products posing the biggest risk for retail financial consumers.
The FSA said it found “some evidence of poor practice in U.K.-authorized firms” that sell exchange-traded products, the regulator said in a report on the retail finance industry published today. The supervisor also said that some lenders sold mortgages that “resulted in detriment for consumers.”
“It is clear that the financial services industry -- firms and regulator -- have a lot of work to do,” Martin Wheatley, the agency’s managing director for conduct, said in an e-mailed statement. “Our analysis means we can focus our work on the most significant risks facing consumers.”
The FSA will be disbanded next year as part of the government’s plans to hand responsibility for banking supervision to the Bank of England. Oversight of trading and consumer rules will be taken over by the Financial Conduct Authority.
Consumer confidence in retail financial products “remains low,” because of declining real income and low interest rates, the FSA said.
The regulator also said that “early signals suggest that greater repayment difficulties in the mortgage markets could materialize again in 2012.”
The total value of outstanding mortgage loans in the U.K. at the end of 2011 was 1.218 trillion pounds ($1.9 trillion), an increase of less than 0.1 percent from the prior quarter, the FSA said in a separate statement.
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