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FCA forced to change register updates after complaint

Firm that agreed to stop regulated activities was able to continue writing business with 11 different providers due to missing information on the FCA register


The FCA has changed the way it issues updates to the FCA register after a complaint uncovered firms are able to carry on writing business despite changes to their regulatory permissions.

An investigation by the Complaints Commissioner found a firm had done business with 11 different providers and carried out 97 mortgage transactions after it had agreed with the FCA not to carry out regulated activities.

The case following a complaint originally made to the FSA, and escalated to the Complaints Commissioner.

The original complaint claimed the regulator did not remove an adviser, known as Mr R, from the register in a timely manner.

The complainant alleged this resulted in them and their late husband doing business with the adviser in June 2010.

FCA complaint handling makes things worse

After the adviser failed to forward relevant information to the couple’s insurer, the complainant’s husband’s life cover was invalidated and the complainant could not claim on the policy when he died.

The insurer said they still did business with Mr R’s advice firm based on the fact it  was still authorised, even though Mr R was no longer authorised.

The FCA complaints team said the regulator acted promptly when it became aware the firm had no professional indemnity insurance cover in December 2009 and the firm agreed in January 2010 not to carry out any regulated activities.

The FCA said this would have been reflected on the register immediately.

Subsequently, the adviser and the firm were found to have breached the agreement not to carry out regulated activities. The adviser was banned and fined in June 2013.

The regulator was unable to give records of what the register looked like in January or June 2010 but gave the commissioner data from its internal systems, which feed into the register. That showed the firm was to stop all regulated activities from 12 January 2010.

Those entries were made on 14 January and would have been visible on the public register from 15 January 2010.

After the complainant commented on a preliminary decision from the commissioner, the watchdog made further enquiries of the FCA.

It found data sold by the regulator through its “register extract system” did not show the firm had to stop regulated activities.

The commissioner says a note sold with the extract makes clear they system does not show restrictions on regulated firms. As a result, the commissioner did not uphold the complaint.

Townsend says: “I appreciate that you found yourself in a very difficult situation but on the evidence available I find that the regulator did follow the correct processes.”

But he has questioned how useful the register extract system is given that information was not included in it.

The complaint report says: “The risks which can arise from the way the system has been operating are demonstrated by the final notice issued in relation to R the firm, which shows the firm had done business with 11 different providers and carried out 97 mortgage transactions after the requirement to stop carrying out regulated activities was placed upon the firm.”

The FCA has since made changes to its data extracts to include restrictions and limitations, which went live in May.

The complaints commissioner recommended the FCA pay the complainant £100 for distress and inconvenience caused.

The complainant argued had they been told they would not be able to secure life  cover for their late husband, they might not have taken out a mortgage or would have made different financial decisions when their husband was alive.

In light of the circumstances, the insurer offered a voluntary payment for the full amount insured which has been accepted.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. The FCA’s maintenance of its register has been utterly shambolic for decades. A friend of mine used to work for the BA network and every so often they’d receive from the FCA (or maybe it was the PIA) a list of all their RI’s and the firms for which they worked. She would then have to spend literally days going through it identifying all the errors, omissions, and oversights, including many changes of which they’d already notified the regulator. It was just a regular chore. This article indicates that little has changed.

    What faith can we or anyone else have in a regulator that’s still so incompetent that it can’t even run a register of who’s authorised by which firm and for what activities?

    Now, is it unreasonable to expect that, upon having secured from a firm an undertaking to cease all and any further regulated activities, any half-competent regulator would send out an e-mail to all providers informing them of this so they would know that from that point on, unless or until notified otherwise, they must accept no further business from said firm?

    Or is this asking too much of the FCA? Perhaps, in light of the amount of resources that must have been consumed in the creation of its 102 page document detailing who within the FCA is responsible for what (yet notably bereft of any procedures to address failures in the fulfilment of those responsibilities), it is. And that, I think we can all agree, is a truly, truly dire state of affairs.

  2. So what sanction do we have for a regulators that fails to regulate?

  3. @katie marriner Surely bigger story is why is FCA selling on data? Whose data, what data, to whom? For what end purpose?

  4. Wow, I bet the FCA were devastated to have to pay over £100 of our money. That sort of thing really hurts. Hang on a minute, I can see us being invoiced for that in the future.

    Seriously though, can you imagine the outcry if we supplied data that was so clearly wrong.

    Considering the product provider was buying the data to ensure compliance, I assume they will be offered a refund of the price they paid for the data and maybe other product providers who had also bought the same data in the belief that it was correct and up to date will be refunded their fees too?

  5. As Julian Stevens says the maintenance of the register has long been shambolic. I would add that based on my experience they must have had dozens of complaints every month about its inaccurancy which they totally ignored.
    It is high time the FCA management became personally liable for loses caused by their negligence.

    • Julian Stevens 21st July 2017 at 4:11 pm

      If only. The FCA has produced a 102 page document (if you can find it, you can take a look) setting out in copious and colourful detail (with lots of pictorial diagrams for those who like such things) who’s responsible for what.

      But nowhere in it is anything about any sort of system for holding to account those who fail to perform their designated responsibilities which, to my way of thinking, is a somewhat crucial omission.

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