The Federal Deposit Insurance Corp. is promising to revise oversight of bank sales of uninsured investment products in the wake of a study showing the industry still isn't giving consumers the right information.

The findings, released Monday, stem from the largest undercover study of banks' investment products sales practices to date.

"More than a fourth of the banks surveyed are still failing to make basic disclosures required," FDIC Chairman Ricki Helfer said. "Twenty-eight percent of the customers in our survey were not told that mutual funds lack deposit insurance. In 30% of the cases, institutions failed to disclose that the products are not obligations of the banks.

"Those results need to be improved," she said.

But industry executives attending a Consumer Bankers Association conference in Washington were skeptical of the survey because the mystery shoppers stopped short of actually opening an investment account.

"There's half a loaf here," said A. William Schenck 3d, vice chairman of Great Western Financial Corp. "You don't get to the final question: Was the customer fully informed when the transaction was made?"

Added Barbara Worthen, general counsel of Fleet Investment Services: "I don't see any news here that would cause a restatement of guidelines or even a requalification. I don't see anything that tells me we have to go back to the drawing board."

The FDIC hired Market Trends Inc., a Bellevue, Wash.-based market research firm to use undercover evaluators, or mystery shoppers, to assess 7,801 sales presentations by bank representatives at 1,194 banks between January and October last year.

Foremost among the FDIC's initiatives is requiring bank employees to pass the securities licensing exams already required of their broker-dealer counterparts.

The move has been long supported by bankers and their trade associations, but securities regulators have thus far balked at allowing nonregistered representatives to take their exams.

Cary H. Hiner, an associate director in the FDIC's division of supervision, said the National Association of Securities Dealers will soon allow bank employees to take its licensing exams. NASD officials could not be reached for comment.

The FDIC also announced plans to conduct seminars to better train bankers and revise examination guidelines to highlight disclosure practices.

The regulators' interagency policy statement on mutual fund sales, released in 1994, also will likely be revised to underscore that a bank is responsible for ensuring that any investment recommendation meets the customer's needs.

The FDIC study found that representatives - who made specific investment recommendations in 53% of telephone sales contacts and 80% of in-person pitches - could have done a better job assessing customer suitability.

Of the total 7,801 sales presentations, 3,915 were by telephone, 3,886 in face-to-face visits. Across the board, bank representatives talking with customers by phone disclosed risk far less frequently and thoroughly than they did during face-to-face sales meetings.

"We need to focus and sensitize reps that sales presentations do occur over the telephone," said Sarah A. Miller, government relations counsel at the American Bankers Association.

While critics questioned whether a mystery shopping approach accurately reflects the true state of bank disclosures, an executive at Market Trends defended its methods.

"It is important for people to know what's involved in a large investment before they get their pens out," said Jeffrey A. Liekhus, vice president at Market Trends.

And bankers acknowledged that the issues raised by the study deserve their attention. "We are committed to the notion of disclosure and suitability," Mr. Schenck said. "It's fundamental to what banks believe in."

Yvette D. Kantrow in Washington contributed to this report.

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