The findings provides independent academic evidence of widespread anti-consumer behaviour and systematic practices that amount to legalised fraud in the British pension and investment industry. The True and Fair Campaign says the findings warrant a Competition Markets Authority enquiry combined with immediate action from the UK Government and Regulator.
Gina Miller, founder of SCM Direct and the True and Fair Campaign says:
“Exploitation of pension savers and investors is a national scandal and this report exposes the depths of the scandal.
“The damning conclusion of this report that: “The evidence reveals a market characterised by a weak demand side that is rapidly growing numerically, and a powerful industry in which misaligned incentives are systemic and which enjoys, largely unchallenged, the potential to exploit consumer behaviour, product structure complexity and the lack of cost transparency” should act as a wake-up shout, not call, for all political parties, Government, regulators and the industry.
“There have also been numerous reports, from the Financial Conduct Authority, the Office of Fair Trading and Government Departments such as the Kay Review, which have all highlighted the structural issue around hidden costs and fees in the UK and called for radical change. This has been met by empty speeches and worthless industry voluntary codes. The principle of ‘Treating Customers Fairly’ has turned out to be just hollow words.
Gina Miller added:
“The two reports that lie behind today’s Financial Services Consumer Panel Report provide a dossier of widespread consumer abuse that must not be allowed to be swept under the carpet, or hushed up in any cosy industry/regulator/government meetings. The scale of the deception is staggering and is both immoral and unjustified.
“The conclusion of this FSCP report that ‘a single charge merits consideration because other options are not working’ would be a huge leap forward for consumers’ basic right to know how much they are paying. The FSCP states that it believes reform would fall within the remit of the FCA or Government.
"We at True and Fair believe there needs to be a full inquiry by the Competition Markets Authority to protect the British consumer, due to the conflicts of interest and powerful influence the pension and investment industry exercises.
“While it is not our place to prejudge the outcomes to such an inquiry, the findings of the FSCP Report that the full costs of investments “are not consistently and comprehensively defined, nor understood” and that “there is a lack of competition” due partly to “profit maximisation combined with incomplete disclosure and poor management of conflicts of interest”, strongly support a full blown CMA inquiry. The weight of evidence is now undeniable. Full transparency on all costs and fees in one number must now be implemented.”
