The FSA has been forced to delay the deadline for brokers to make their retail mediation activities returns (RMAR) because of "teething problems" with the online system.
Brokers were required to submit an RMAR return for the period from 1 April to 30 June 2005 by 11 August. But the FSA has extended the deadline to 9 September.
The regulator would not explain the nature of the problems but Insurance Times has been contacted by a number of brokers concerned about a catalogue of errors and glitches which have weakened the system to the point of collapse.
These included: incorrect advice from FSA help centre staff; passwords that did not work; and problems in entering the data onto the system (see box).
Compliancesolutions.co.uk managing director Gary Dixon said: "There is no doubt that if the FSA hadn't changed the deadline it would have gone into meltdown.
"The FSA has been defeated by its own technology."
The FSA piloted the online system with 70 firms earlier this year, but Dixon said this was "not enough" to cover the different areas which the 16,000 firms regulated by the FSA do business in.
Those firms hit hardest by technical hitches took FSA advice to contact the help line. But one broker who did not want to be named said: "The initial FSA advice given to us was wrong, and thus we phoned a total of five times on two questions and received a different answer each time. Their incompetence is staggering."
Others have been referred to the FSA handbook, which another brokers described as "not helpful".
A further broker claimed there had been "serious flaws" in the system which did not recognise general insurance-only intermediaries. "Considering this is a multi-million pound regulatory body, I'm amazed," the broker said.
The FSA claimed it had told brokers of the amended deadline, but many brokers were not aware of it. Dixon said: "Staff on the helpline have not been told about the changes."
An FSA spokeswoman said: "This is a new and large project, and there have been some problems. We are working with firms to address those problems."
A catalogue of errors
According to brokers who contacted Insurance Times, the problems with the system included:
