A European Parliament committee probing the scandal of insurer Equitable Life has urged Britain to compensate policyholders who lost savings.
The committee's damning report says the UK government bears responsibility, because it did not comply with EU law that would have protected them.
Equitable Life slashed policyholders' savings or pensions when it nearly collapsed in 2000.
More than a million were hit in the UK, 8,000 in Ireland and 4,000 in Germany.
The MEPs criticise the UK Financial Ombudsman Service for "serious shortcomings" in its operation.
They also condemn UK ministers and regulators who failed to give evidence.
"If you were Irish or Dutch or German or had bought a policy outside the UK you had no-one you could go to," said British MEP Sir Robert Atkins.
Authorities outside the UK said it was a matter for the UK regulator, he said, but the UK regulator was not interested in people calling from abroad.
British MEP Diana Wallis, who drafted the report, said the saga showed that the European Commission needed to do more to ensure that EU directives were properly implemented.
Labour members of the committee tried but failed to water down the criticism of the UK government.
There is no further opportunity to amend the report, though it can still be rejected by the full parliament in June.
