The FSA (The Financial Services Authority) wants to impose considerably higher fines on companies, or individuals, who treat their customers dishonestly or take part in insider dealing.

The FSA are concerned that the current level of financial penalties is not high enough, and does not do enough to deter individuals or firms from engaging in bad practices. It has said that in some cases it would like to issue fines that are treble the current level.

Under the new proposals, individuals could be fined up to 40% of their total salary and bonuses, and companies could be liable for penalties of up to 20% of their turnover. Individuals deemed to be guilty of market abuse will face a minimum penalty of £100,000.

Many commentators blame financial establishments, and the people within them, for the current economic mess. The FSA has been criticised for not acting quickly enough to curb some of the maverick practices that were going on inside these organisations. The UK is left with record numbers of people looking for ways to get out of debt; seeking debt advice, or embarking on debt management schemes, or IVA’s in an effort to solve their unmanageable debt problems.

The FSA has increased the number of fines that have been issued. During the latest financial year, it imposed penalties of £27.3 million, compared to just £4.4 for the previous twelve months. They also increased the number of individuals banned from carrying out regulated activities.