The FSA will be publishing a “health alert” to warn about risky financial products in an attempt to rid the industry of mis-selling scandals, it has been revealed.

Margaret Cole, FSA interim managing director of business conduct, told Reuters: “I expect us to start issuing warnings soon.”

The financial regulator will ensure that the alerts sent to firms as well as to consumers are made public.

Whilst the industry expects tougher consumer protection powers from Britain or the European Union to come into force over the next couple of years, Margaret Cole has stated that she is not going to wait. Financial lawyers have warned companies that the FSA will be looking to make examples of those companies who break their guidelines.

Margaret Cole continued: “We have been asking for minutes of product approval meetings and there are examples where we have told a firm to go back and add features to a product to bring about greater comfort on our part.”

She said that the FSA will be looking more closely at product margins after the “enormous” profits that occurs as a result of the mis-selling of Payment Protection Insurance and is also likely to delay licenses if a company’s business model is seen to rely on a “novel product” with a suspect design, reports the IFAOnline.

It is predicted that the government will give the soon-to-be-introduced FCA powers enabling them to ban “toxic” products that are damaging for customers for a maximum of a year.