Banks 'let off' more than £60m in fines by watchdog Big banks and insurers have been forgiven more than £60m in fines for mis-selling and other wrongdoings by the City watchdog since 2010, an Independent on Sunday investigation can reveal. The Financial Services Authority has been routinely slashing the fines of financial firms in return for an early agreement that they will accept the findings of its investigations. Only last week, Barclays, after being found guilty of fixing a key interest rate used to price loans and mortgages, was let off with more than £25m of its fine; US regulators, on the other hand, came to no such pre-agreement with the bank. Even in instances where banks have been repeat offenders for mis-selling or mishandling client information the FSA has continued to forgive a large portion of fines. Since 2010, out of 20 fines given to large banks, building societies and insurers, 18 attracted an instantaneous and substantial discount often running into the millions of pounds. And the amount of money being forgiven has surged in recent times. Back in 2008, for instance, the FSA discounted just £3m, while many fines issued to individuals and small firms have not attracted a discount. The routine fine discounting by the FSA has been criticised by consumer groups: "By taking what it calls its preferred approach, and discounting fines the FSA is a 'soft touch'. I don't think, after Barclays, that the public is in the mood for it any longer," said Marc Gander, the founder of the Consumer Action Groups, set up to fight the banks over unfair charges. Likewise, the consumer group Which? would like to see the fines regime toughened up: "Fines handed down to banks need to be much higher so that they are a credible deterrent. We are not against reduced fines on banks who admit guilt early, but the discounts shouldn't be so large," said Peter Vicary-Smith, Which?'s chief executive. In response, the FSA said it forgave banks and insurers up to 30 per cent of their fines to save time and money: "What we don't want is for institutions to fight us all the way and take their cases to tribunal. "We want them to co-operate with our investigation and offering a 30 per cent discount can lead to a much more expedient settlement," said Joseph Eyre of the FSA. The revelation that the FSA has been routinely slashing fines will add to the debate over what should happen to the money that it does gather in. Last week, Chancellor George Osborne said he would consider whether the FSA's fines should go to taxpayers rather than being rebated to the financial services industry, a potential move supported by Which? "These funds should be to benefit consumers directly, for example through independent debt advice and financial education for young people," said Mr Vicary-Smith.