It’s not often that it’s worth reading the annual business plan of the Financial Services Authority. And it’s certainly not the sort of document you’d want to be thumbing through on a leisurely Saturday.

But this week I took a little time out to leaf through the 58-page tome released by the regulator on Wednesday. In it, the FSA reiterates its focus on certain potentially problematic product areas such as equity release or payment protection insurance, which is designed to meet loan repayments if you are unable to work.

But the regulator also gave a brief update on its Treating Customers Fairly initiative which is quietly taking the financial services industry by storm. The FSA is just starting its compliance visits on member firms from banks and insurance companies right through to financial advisers. For the first time it will check how companies are reacting to its TCF rules. And by September, it will report back on how well companies are dealing with TCF.

This focus is provoking a mixed reaction from the industry. In public, the major trade bodies welcome the TCF regime, saying it has focused the industry’s mind on best practice initiatives. But in many cases they claim their members were already implementing their own initiatives.

Privately, however, there is much greater concern. The biggest worry among providers is that the FSA has failed to state explicitly what it means by Treating Customers Fairly. This move to less prescriptive principles-based regulation is irking some financial services companies which are used to clearly defined rules.

But what is annoying the industry may actually be rather good for consumers. By failing to give firm definitions of what it means by “fairly”, the FSA is forcing companies to make their own interpretations. Companies that are strict with their definitions may end up doing more than they really need to but at least they will be able to rest assured that they are unlikely to face any recriminations from the FSA.

According to one lawyer who is helping firms interpret the TCF regime, most companies seem to be veering in favour of stricter definitions. In particular, he says this is causing financial institutions to move towards more explicit and consumer-friendly terms and conditions. Whereas in the past companies used to rely on their own discretion to change charges or terms in certain scenarios, he says many of his client companies are opting to reword their product literature so that it is clear at the outset when, why and by how much charges may rise.

The British Bankers’ Association says its members are taking a much closer look at how they remunerate their sales staff and that much greater emphasis is now being placed on the quality of advice and customer satisfaction rather than the level of sales. This trend has been accelerated by TCF, the industry body says. Treating Customers Fairly has also led to BBA members taking a much closer look at the small print in their product literature with a move towards clearer terms and conditions, the body says.

We won’t know until later this year how financial services companies have been responding to the FSA’s Treating Customers Fairly campaign. But if the early signs of change from within the industry are borne out, this is a much-needed feather in the cap for the regulator.

Following Shell’s announcement of record profits this week and with oil prices still near all-time highs, the price of petrol is very much back in the headlines. Which is why I was interested in a press release that landed on my desk this week, claiming to offer significant reductions on forecourt petrol prices.

The Pipeline Card (www.pipelinecard.org) claims it will offer its members discounts of between 5p and 10p on a litre of petrol when it goes live in April. What’s more there is no joining fee or annual cost.

So how does the card work? Pipeline says it will link up with just one major petrol retailer. In return for petrol discounts, this retailer will get a load of loyal customers, many of whom will spend cash in the stores attached to petrol stations. With Pipeline promising no costs for consumers, this looks like a deal worth signing up for.
rob.budden@ft.com