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FCA pays out over register entry that was inaccurate for four years

The regulator has agreed to review its processes for updating the financial services register and will compensate an investor who was scammed after relying on incorrect information.

A final report from the Complaints Commissioner says a complainant used the register to check the authorisation and defaults history of a credit union before buying bonds.

The complainant was them scammed by a different firm purporting to be the credit union.

The final report says the financial services register showed the credit union was still authorised and active until recently, despite having been defunct since 2012.

Complaints Commissioner Antony Townsend says the complainant should be compensated because they undertook the appropriate level of due diligence checking and relying on the FCA’s information.

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Subsequently, Townsend has confirmed the FCA failed to update the register for four years.

Townsend says: “A clone firm perpetrated the scam, however, this scam was facilitated by the inaccuracy of the FCA register, which was not updated for some four years despite the FCA having information to show that the credit union was not trading.”

“The FCA accepts that you might not have made the investment if the register had been accurate.”

Townsend also says the £150 offered to the complainant by the FCA after it upheld the complaint is not sufficient.

A sum of £22,137.50 has been ordered by Townsend to be paid out by the FCA, representing 50 per cent of the complainant’s loss. The £150 will also be paid.

Responding to the Commissioner’s report, the regulator says: “The FCA is reviewing its process for updating the Financial Services Register when it is aware that a firm is no longer trading.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. I do hope this fine is paid for by the reductions in bonuses !!

    Not from the daily coffers ….this is our clients money …it’s not fair for the fees they collect go to pay for their own incompetence as well !

  2. There are actually two cost issues here which should result in disciplinary action at the FCA.
    The first is the original decision to leave the register inaccurate for 4 years and the member of staff responsible may have since left. In which case, they should be called back to discuss their failure with their former employer and a “note of record” passed from the FCA to their new employer if they remain in the FS industry, but the third issue is actually more important.
    Secondly – There is now going to be a fine and that fine will as we all know be met from FS fees raised against firms actually ON the register and still practicing and NOT used to penalize any of those responsible (or irresponsible) for the register.
    Thirdly – Internal and external staff time and money was spent by the FCA trying to defend itself and it’s staff against the indefensible (it shouldn’t have needed the complaints commissioner to rule on this as common sense says they were at fault)
    I have complained about the FCA before and it took a YEAR for them to reach their internal decision (totally outside their guidelines) I decided not to waste the commissioners time and our money with it when they rejected parts of my complaint as I felt I’d made my point. Someone at the FCA in this case decided they wanted to fight it which is easy to do when you’re being paid to defend the indefensible, but not so easy when as a firm you have to decide whether the personal cost of standing on your principles is worth it. It is time for the FCA senior staff who make these decisions when they loose them to be held accountable and I for one would like to see someone actually take responsibility and either resign or at least so some contrition as I see NONE at present, not even a “sorry we got it wrong.”
    Currently the staff appear unaccountable for their actions.

  3. The FS register is a statutory register and someone at the FCA made a conscious decision to allow it to be inaccurate which could be argued to have lead to this lose to this consumer.
    I think the commissioner has been lenient to the FCA and the consumer has still come off poorly at a result and would be interested to hear from some of the legal bods on here whether they think he’d have a chance of taking legal action against the FCA for professional negligence? The failure to maintain the accuracy of the register is negligent and the question is was it willful negligence or accidental? The original response from the FCA implies it was willful

  4. Julian Stevens 10th July 2018 at 5:02 pm

    The FCA has the temerity to lecture US on how to run OUR businesses properly, whilst the FCA itself evidently couldn’t competently run a wine-tasting afternoon in a vineyard.

  5. Andrew Collier 10th July 2018 at 5:19 pm

    Just when you think you have seen it all…

  6. Julian Stevens 10th July 2018 at 6:13 pm

    Needless to say, no one at the FCA will ever be held to account….

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