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40% of unauthorised firms hit with FCA warnings still have active websites

Around 40 per cent of online unauthorised firms subject to recent FCA warnings still have active websites, Money Marketing research can reveal.

Since the FCA replaced the FSA in April it has published 142 warnings to consumers about unauthorised firms to avoid, including pension-unlocking firms, carbon credit trading and clones of genuine financial services firms.

Money Marketing research, conducted last week, of the most recent 100 warnings finds that 74 of the firms used a company website to promote themselves online and, of this number, 31 still have active websites.

Regulation experts warn the FCA has an uphill battle in attempting to crackdown on unauthorised firms, particularly when the firm is based offshore. 

PwC partner and former FSA chief operating officer David Kenmir says: “It is a worrying area for society, as a lot of financial crime these days originates via the internet. Clearly it is very easy to establish a business, real or otherwise, in a matter of hours. This is likely to a growing problem.”

Unauthorised firm warnings appear on a section of the FCA’s website. However, compliance expert Adam Samuel says the vulnerable consumers usually targeted by such firms are unlikely to check the regulator’s site. “It is Joe Public, those not very interested in engaging with financial services, who is going to get taken for a ride here,” he adds.

Essential IFA managing director Peter Herd says: “Unauthorised firms are costing consumers millions and I just don’t think the FCA is doing enough to stop them. When I have spoken to the regulator about specific firms they have told me they don’t have enough resource to deal with this issue, which is really worrying. The regulator needs to be doing more to close these firms down.”

An FCA spokesman says: “We use our criminal and civil powers to take action through the courts to stop those firms and individuals who pose the greatest harm to consumers. We take seriously all information we receive about unauthorised firms operating in the UK and targeting UK consumers.”

MM leader: The tough battle against unathorised firms 

Is the FCA doing enough to tackle unauthorised firms? p.8-9 

Link to leader p.25 


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. How can they say they don’t have the resources when normal IFAs feel swamped by their regulatory waffle?

    To use an old phrase: Go and catch some real criminals.

  2. This is incredibly frustrating and my thoughts echo MiBs sentiments.

    Whilst politicians focus on charges on regulated pension plans etc. there are clients being encouraged by unregulated non-advisers to invest in get rich quick investments / pension liberation schemes which promise the earth (and coincidentally pay oodles of commission) which invariably result in the client exposed to niche and often illiquid investments and they often fail to deliver.

    A combination of the use of the law and client awareness should resolve this but for the time being it feels that this is still rife.

  3. If the FCA take reports so seriously why is it that they are also looking to exempt many of the unauthorised firms through regulations are designed primarily to exempt solicitors and accountants when referring leads to IFA’s.

    From an email from FCA

    “This exclusion is specified under Article 33 of The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (“the RAO”). In broad terms, Article 33 of the RAO provides for an exclusion in respect of an unauthorised firm which merely introduces to an authorised firm, for the authorised firm to provide the regulated advice or to make the arrangements in respect of investments”.

    Natalie did a report about six months ago on the number of whistleblowing reports that were investigated by the FCA unauthorised business team and how many resulted in prosecutions. If the FCA take every report seriously then why is it we have such a low level of enforcement action taken against whistle blowing reports. I could list some examples like a well-known overseas property company.

    The emphasis of FCA needs to change dramatically towards enforcing authorisation rules and carrying out its primary objective which is to PROTECT THE CONSUMER. How can a claim to be doing this if it is not doing anything about authorisation!!!

    The least the FCA should be doing is to reconfirm what authorisation actually means in a simple clear guidance rather than a confusing mess of its present rulebook. I also would like to see the FCA publish its data on enforcement action including how many reports of been received, how many have been investigated and how many have been prosecuted.

    It’s interesting to note that one of my responses from the FCA states that they have limited resources to do proactive work. The FCA has a total budget of £456 million I do not call that limited.

  4. I have just been approached by a friend who’d like me to advise her. She is a UK national who has worked abroad from time to time and so has ended up with an FPInternational Premier bond/pension (not sure which yet). She is UK resident and currently IN the UK. Her current adviser is based in Cyprus and having checked gthe FCa register, they have pas sporting rights, but the FCA register is then about as much use as a chocolate fireguard as it just refers you to the Cypriot website. No record of WHAT the firm is authorized to do in the UK….
    As said by others above, isn’t it time the FCA used their VERY substantial resources to focus on the unregulated more now and leave the majority of honest regulated to get on with their jobs. there will always be some bad pennies, but most of them are not regulated and even if they are, are not regulated in the UK now!

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