Gina Miller slams FCA's 'scandalous' compensation review
'Intellectually dishonest and... contrary to the law'
Campaigner Gina Miller has slammed the Financial Conduct Authority's (FCA) review of the compensation scheme for victims of financial loss resulting from regulatory failure as "scandalous".
Miller said the FCA had quietly launched a consultation of the scheme that guards consumers against failure by the UK's financial regulators over the summer.
In an open letter to the Treasury Select Committee, Miller said the proposals put forward by the FCA amounted to a flimsy new compensation scheme that was "intellectually dishonest, morally questionable and, from our understanding, contrary to law".
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She argued that the short eight-week consultation period contravened the Government's Principles of Consultation code.
"It also took place over the summer holidays and during an unprecedented pandemic, factors we firmly believe should have required the FCA to give more, not less, time in order that stakeholders have the opportunity to respond to the consultation in a considered and timely way," Miller claimed.
In addition, Miller said, the reforms proposed would not just significantly limit the scope for claims, but would also introduce caps on compensation awarded to consumers of £1,000 for victims who have experienced distress and inconvenience, and £10,000 for those who have experienced financial loss.
Recent research by Miller and her husband Alan's True and Fair Campaign showed the regulator had paid out just £13,475 through the scheme in the past 18 months.
"We agree there needs to be a review of this compensation scheme, not least due to the pitifully low payouts," Alan Miller said.
"But the review should be conducted in a comprehensive, considered and objective manner," he continued.
"Public confidence demands that this consultation delivers on what it says it is - an opportunity for victims of financial wrongdoing to seek redress."
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The open letter urged the committee to investigate the circumstances in which the consultation was launched.
"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," Gina Miller added.
"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?
"To also hold this consultation before the three independent reviews into HBOS Reading, London Capital & Finance and Connaught are published, appears calculated. The way this consultation has been contrived is a travesty of justice and tragedy for UK consumers."
Miller pointed out the FCA's "dragging its feet" over the publication of both the Dobbs Review and the Gloster Review "stands in stark contrast" to its "desire to quietly and quickly" conduct the review of its own compensation scheme.
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