This email was sent to Money Box subscribers on 3 July 2009


Dear listener,

 

I won! In the High Court no less. His Honour Mr Justice Munby ruled that "The FSA... fails on the first limb of the Lewis appeal." Sadly, his honour's judgement was also that "the FSA succeeds... on the second limb of the Lewis appeal."

 

This score draw – 1-1 – was the outcome of a four year battle on behalf of consumers to force the Financial Services Authority to reveal the names of 20 firms which it had secretly investigated to see how they sold equity release products. Often called "lifetime mortgages" they allow individuals over 60 years old to borrow money against the value of their home to help with their living costs. The investigation involved sending researchers pretending to be customers to the 20 firms. This kind of mystery shopping exercise is widely used to assess how financial products are being sold. And, like an opinion poll in the street, the firms surveyed were picked at random to get a sense of the market not because of any suspicions about them.

 

The FSA revealed that more than 60% of this randomly selected sample of firms had not explained the downsides of equity release. There were various other failings and only one firm out of the 20 avoided all the criticisms. Overall it was clear that that under any definition many of the 20 firms had mis-sold equity release products. So I also asked for the names of the firms which had failed in these ways and in particular seven firms where there was particular concern about the advice given to invest the money borrowed.

 

The FSA refused both requests. Which means that it knows which firms were potentially mis-selling equity release but the public – who are the potential future victims – did not. The FSA says it "believes that publishing the names of the firms in the mystery shopping exercise and those where it had concerns would harm the commercial interests of firms and the release of individuals' names would constitute a breach of the Data Protection Act 1998."

 

When a data holder digs in, the Freedom of Information process is cumbersome and lengthy. The request – which I began in May 2005 – went to (a) internal review where I lost (b) Information Commissioner where I won (c) Information Tribunal where I also won and (d) High Court where I got this draw.

 

But the process is by no means over yet. First, Judge Munby's ruling could be appealed. And of course I hope that the Information Commissioner will appeal the part of the case which it lost. But even if the FSA does not appeal, the ruling I lost on was just a single point of law. And the Tribunal still has to consider all the other arguments the FSA used to keep this information secret.

 

Meanwhile mystery shopping exercises continue and the FSA, one of whose jobs is the protection of consumers, continues to keep from the public the names of those firms which its own research reveals have mis-sold financial products. Perhaps it should be renamed the Fundamentally Secretive Agency.

 

*** IN THE BEST RADIO PROGRAMME THIS SATURDAY ***

 

I interviewed the new Pensions Minister, Angela Eagle, last week at her office near Parliament. She is the 11th pensions minister since Labour came to power 12 years ago (if you count Stephen Timms on both the occasions he filled that job). I have interviewed all of them. Angela will have less than a year in the post before the General Election and, even if Labour wins, a reshuffle of this role is a just about certain. So that puts her tenure just under the average for the job of one year, two months and one week.

 

The longest serving was Malcolm Wicks who was pensions minister for nearly one year, 11 months (14 June 2003 to 6 May 2005). The briefest was the eight months of Angela Eagle's predecessor, Rosie Winterton (6 October 2008 to 8 June 2009). Does the quantity of ministers mean the government takes pensions seriously? Or does their brief life indicate the opposite?

 

Just eight months after the latest laws came into force to protect us when we borrow money the government has launched a new policy paper setting out a new set of ideas to, well, protect us a bit more. Are they needed? Are they enough? Will they work? And with a maximum of 10 months left before things come to a halt for a General Election (final date for voting 3 June 2010) will they happen at all?

 

Everyone with a house wants them to go up. Everyone aspiring to buy their first home wants them to go down. House prices of course. And new figures will make the haves happier than the have-nots.

 

How do you avoid paying more than £2,000 to insure the car driven by your newly qualified teenage child? What you don't do is follow the advice on Top Gear. Instead we reveal how you might legally get 50% off.

 

And three weeks after we were told by the administrator "I'm confident that the investors' funds are fully secure" we'll be reporting on new fears for the money in capital protected funds administered by Keydata – now in administration – may not be as safe as we were told.

 

It's a lot to squeeze in. Find out if we manage it by listening to Money Box on Saturday at noon, Sunday at 9pm, or through our website any time or subscribe to the podcast and never miss an episode. Go to our website bbc.co.uk/moneybox to do that, Have Your Say, watch videos, read why we are the Best Radio Programme and find out more about all the items covered this week. In May, our web pages and stories hit another new high with viewings now more than 600,000 in the month.

 

Best wishes,

 

Paul

 

PS Don't forget the programme taster on BBC Breakfast between quarter to nine and nine o'clock. If you miss it, you can watch it on our website.

 


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