Customers deserve better. If the financial services industry is to enjoy their trust it must treat customers fairly throughout the term of the commercial relationship.

Christine Farnish of the FSA

It says that financial services companies must meet the ongoing needs of their customers, as well as changes in economic conditions.

It also plans to publish league tables of complaints against companies.

Christine Farnish, consumer director, said: "Customers deserve better. If the financial services industry is to enjoy their trust it must treat customers fairly throughout the term of the commercial relationship not just when making the sale."

The FSA will have greater regulatory powers later in the year to deal with complaints and unfair contract terms.

Main concerns

• Companies fail to inform customers of new and more suitable products

• Poor complaint handling by some firms

• Products do not always match up to its original advertisement

• Failure to inform customers of risks associated with complex products

• Unnecessary jargon which makes some financial products difficult to understand

• Switching products is held up by unfair barriers, such as exit penalties

Industry backlash

The FSA's proposals are outlined in a discussion paper called "Treating retail customers fairly after the point of sale". Its proposals are now with consumer groups and industry bodies.

But the financial services industry is already voicing concerns over the proposals.

After-sales care should be a top priority

In a strongly-worded letter in the Financial Times newspaper, Mary Francis, director-general of the Association of British Insurers (ABI) accused the FSA of bias towards consumers.

She wrote: "The FSA was not established as a consumers' lobbying organisation."

With one in four consumers reporting a current problem with a financial services firm, consumer groups feel that the proposals are long overdue.

Many of the issues were addressed last year in a comprehensive review of the banking industry by Don Cruickshank, now chairman of the London Stock Exchange. The report called for a wide-ranging clean up of the financial services industry and greater transparency for consumers.

Web scams

The FSA has also reported results from an investigation into fraud on the internet.

It has found that 28 UK websites are apparently breaking the law by offering unauthorised investments or advice.

In addition, the FSA found 35 sites overseas that also appeared to be breaking the law.

Surfing the net can be hazardous

The sites were discovered during the second international internet surf day involving 41 regulatory bodies from 34 countries.

FSA's Managing Director Carol Sergeant said: "The internet has opened up new opportunities for consumers and the financial services industry. Unfortunately, these benefits also provide new opportunities for those intent on undertaking unlawful activities on a global basis."

People who are concerned about web fraud or whether sites are authorised to sell investment products or give advice in the UK, can check with the FSA's central register or visit the FSA's consumer help section on its website.