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Analyse the extent to which issues of nancial service ethics are effectively addressed.

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Introduction

Transfer-Encoding: chunked I am working as a trainee TV journalist for ITV. ITV is planning to run a feature article on financial services. My production has been seen by a financial services recruitment agency, Taylor Green. They were most impressed with the quality of my production. Taylor Green wants me to produce some materials for them. Following my research and investigation, I am going to produce a report that analyses the extent to which issues of financial service ethics are effectively addressed by the current regulatory framework. I will provide a report giving a balanced view on the effectiveness of legislation and reach a judgement on this and make recommendations. All businesses that operate in the financial services industry has a duty of care towards their customers. They must make sure they are completely honest when selling products to their customers. They need to make sure they provide all details of products, what it is, how it works the benefits and also the risks; they cannot force products upon the customers. They should also not be supporting any business that is working in an unethical way. An example of unethical practice was when financial institutions like bank and building societies mis-sold payment protection insurance (PPI). ...read more.

Middle

They acted upon the unethical practice of Lloyds and fined them for their wrong doings. They did a great job and they should continue to act upon complaints especially from staff. All businesses and individuals have a social responsibility in regards to the paying of tax. No business or person should avoid or evade the payment of taxes as it is unethical. Tax avoidance is the use of legal methods to modify an individual's financial situation in order to lower the amount of income tax owed. An example of tax avoidance in the UK is Starbucks. Starbucks were manipulating their financial data to show that they had losses. Corporation tax is only payable if you make profits, therefore Starbucks didn’t have to pay any corporation tax. Starbucks were still opening new coffee shops and so it was questionable how they did this when making losses. They had to appear in front of the parliamentary committee yet didn’t declare they were avoiding tax. Although they were not officially charged, the publicity impacted their reputation and customers stopped buying coffee from them. Therefore, Starbucks decided to pay out £20million out of good will gesture over two years, £10million each year. ...read more.

Conclusion

They were fined almost $2billion for failing to stop criminals using its banking systems to launder money. The FCA are in charge of these issues. I believe they do a good job, however the fines should be much larger to discourage it from happening again. Industrial democracy is another important factor; businesses should always treat their staff ethically. Nadia Eweida is an example where she was treated unethically. She worked for British Airways (BA) and was prohibited to wear a silver cross on a necklace. When she refused to conceal the cross she was fired. She went to UK courts to fight her cause for unfair dismissal, she lost. She then went to EU courts and won her case and BA had to compensate her worth £26,000. The UK were not effective in helping Nadia’s case as she lost them. The UK laws, courts and tribunals need to work better to protect UK people rather than the EU courts. In conclusion, I have now given examples of where there has been a lack of unethical practice and lack of duty of care and how regulatory bodies have dealt well or poorly with issues. I personally believe that there are many authorities in place that are working well to control businesses and to ensure everyone is treated fairly but there are many improvements to be made. ...read more.

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