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Chelsea on hold as Isa call centre quits

Chelsea Financial Services’ call centre provider has quit over FSA fears at the height of the Isa season.

The call centre firm has given a month’s notice and will no longer provide its services for Chelsea from March 19. The discount broker has just sent out brochures to 80,000 clients and is running an advertising campaign in the Telegraph and Sunday Telegraph which is costing “tens of thousands of pounds”.

Chelsea says the call centre, which it has used for over four years, pulled the plug after its new owners interpreted the Financial Services & Markets Act 2000 (regulated activities 2001) to mean that call centres needed to be FSA-authorised.

Chelsea managing director Darius McDermott says the IFA owns the number used in advertising and is hoping to find another call centre to take over. Around 20 per cent of Chelsea’s annual sales are transacted in March.

If a replacement cannot be found quickly, Chelsea will hire extra staff to answer calls.

The dispute centres on chapter six, clause 25 of the FSMA, with the call centre interpreting its role as arranging transactions between Chelsea and the client.

But Chelsea disputes this interpretation, saying that the call centre only takes names and addresses and sends out brochures to interested parties, which it says does not amount to arranging transactions.

Both sides have taken advice from lawyers but cannot come to an agreement.

McDermott says: “The timing is very upsetting given our brochure has just gone out to 80,000 clients.”

FSA spokesman Robin Gordon-Walker says: “It is ultimately a judgement call as to whether a company believes it is carrying out a regulated activity.”

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