FSA names and shames Skipton, IF

Skipton Building Society and the online bank Intelligent Finance have been named and shamed as the first victims of the chief City watchdog's unfair contracts unit. The Financial Services Authority (FSA) said both firms had been ordered to take controversial clauses out of their terms and conditions. Skipton was pulled up on a clause in the terms of its savings accounts. The FSA said savers were potentially liable for any fraud on their accounts, even if the problem was a lapse in Skipton's own procedures.

The FSA established the unfair contracts unit earlier this year to consider complaints about the standard contracts issued by firms it regulates. The watchdog said it had ordered Skipton to withdraw this part of the clause.

Jennifer Holloway, a Skipton spokesperson, said the problem was an old issue. "We were happy to make a small change to our terms and conditions."

Intelligent Finance was criticised for a clause that allowed it to raise charges on all-in-one savings and mortgage products without consulting clients. The FSA was also concerned that customers were charged a fee when pulling out of the contract, so were not free to switch provider.

Intelligent Finance said it had already reworded its contract. "Our terms and conditions are reviewed and reissued on a regular basis," said Jennifer Blackwood, a spokeswoman.