FSA blames failure to investigate Ideal fraud on misunderstanding

A "misunderstanding" at the Financial Services Authority (FSA) may have allowed fraudulent broker Neil McKay to continue operating as Ideal Insurance and defrauding his clients.

The Lancashire-based broker was recently banned by the regulator for cancelling contracts of insurance without customers' knowledge and failing to pass on premium payments from customers to other intermediaries or insurers.

However, it has emerged that the FSA had been warned it was possible that fraud was being committed