Sam Dunn: Shaken and stirred by the FSA's 007s

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The Independent Online

Unhappily, I got side-tracked by homework and school and the dream died. Yet the appeal of being able to go about one's business in stealth - particularly when it's in the pursuit of truth and justice - remains as strong as ever.

Officials at the Financial Services Authority (FSA), the City watchdog, appear to share some of m zeal for clandestine action. In its apparently burgeoning "covert ops" department, FSA agents are telephoning financial services companies pretending to be genuine customers to check up on their behaviour towards the general public.

In May, an FSA stealth exercise exposed rickety practices in the equity-release market.

Details of their latest "mystery shopper" exercise emerged last week, with the usual egg-on-their-faces for the companies involved.

This time, mortgage lenders and brokers were targeted to see if they were disclosing the full costs, features and risks of a home loan to potential customers.

To be fully compliant with new rules to prevent mortgage mis-selling, companies have to provide two vital documents: the Key Facts Illustration and Initial Disclosure Document.

Alas, the results of the FSA's research were grim - more than half (55 per cent) of the companies failed to pass muster. In 15 per cent of cases, the broker or lender failed to show either of the two documents; in nearly a third, one of the two was omitted. If this behaviour continues, the FSA can use its enforcement powers to levy fines.

The usual round of hand-wringing has followed, with the Council of Mortgage Lenders promising that its members will redouble their efforts to comply with the rules governing the sale of home loans.

It may not be glamorous, but mystery shopping in the financial services industry is the new spying. Consumers have nothing to fear - companies everything.

Air travel anguish

It seems a stint napping on an airport departure-lounge sofa is becoming a annual summer event for holidaymakers.

The brouhaha that has followed strikes by British Airways staff will be a test of new EU legislation that demands airlines compensate passengers for delayed and cancelled flights.

In particular, it will be telling to see how far other airlines that have suffered a knock-on effect from the BA strike rely on a get-out clause in the legislation to let them wriggle off the compensation hook.

When flights are cancelled or delayed because of events beyond its control, an airline does not have to pay out (although many do try to help travellers).

Unfortunately, evidence is mounting that airlines are trying to exploit this loophole to the maximum. Blame is all too readily pinned on severe weather problems or wildcat strikes such as that at Heathrow last week.

Consumers' compensation claims are routinely sent packing, and the Air Transport Users' Council has a backlog of complaints. This is not what the new laws were set up for.

If the problem gets out of hand - and that's looking more likely - a review of the legislation originally designed to protect travellers will become critical.

These laws weren't meant to leave passengers stranded.

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