MPs demand action to prevent repeat of Farepak scandal

The Commons Treasury Committee has demanded urgent consideration of ways to
prevent a repeat of the Farepak scandal.

MPs called for ‘evidence of substantial progress by the end of January’ in a
report that demands for more to be done to end financial exclusion.

They urged the FSA, OFT and government ‘as a matter of urgency’ to consider
how to implement appropriate safeguards, including an examination of whether the
FSA’s responsibilities should be expanded to include savings clubs of the
Farepak ilk.

The report said the failure ‘has highlighted a serious lack of consumer
protection that could have much wider implications for savings products’.

Concerns include fears that the scandal has created more public
disillusionment over savings in the wake of difficulties with endowment
mortgages and failing pension schemes.

The MPs demanded the FSA do more to end financial exclusion, and blamed
restrictions designed to curb money laundering for excluding those with less
adequate identity documentation from access to financial services.

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