Free banking ‘aids mis-selling’

FREE banking is making it harder to stamp out the mis-selling of complex financial products as lenders chase shrinking profits in the face of record low interest rates, the Financial Services Authority warned yesterday.

Martin Wheatley, managing director at the FSA, said there are still problems in how financial salespeople are incentivised, often pushing one particular product on a customer rather than offering a real choice.

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Wheatley said he was not advocating an end to free banking but wanted to send a “shot across the bows” of the industry to come clean over true costs and alter some sales practices. He added: “The financial services industry has got a lot of trust to rebuild with the consumer.”

The British Bankers’ Association said no members had told it of plans to end free banking.