The Complaints Commissioner has said the FCA might have to pay out more compensation after incorrectly listing a firm on its warning webpage, and should clarify what evidence it needs from the firm to prove it suffered financial loss.
“Company C” was wrongly listed on the FCA’s warnings webpage as being unregulated between September 2013 and April 2015.
An initial complaint to the regulator seeking financial compensation was upheld in November 2015. The FCA asked the complainant for more evidence on how many clients Company C would expect through its website as well as further evidence about initial and ongoing fees.
According to a decision from the Complaints Commissioner, the complainant told the FCA in February 2016 that if the warning had not been published, Company C would have had 17 additional clients between 2013 and 2015 worth more than £2.48m.
The FCA responded that it was reasonable to assume that there were 17 unique visitors to Company C’s website between 2013 and 2015, but it wanted proof of the firm’s actual losses.
The regulator offered a £500 payment for distress and inconvenience, which in its complaint to the commissioner, the complainant said was a “derisory offer” because of the possible losses suffered by Company C.
Complaints Commissioner Antony Townsend acknowledged the FCA compensation offer, but said it might have to offer an additional payment for direct financial loss if it received evidence of an actual loss.
Townsend says: “The FCA undertook a thorough investigation into your complaint and openly admitted its errors. It offered a payment for distress and inconvenience, but concluded that it did not have sufficient evidence of direct loss to consider a payment for financial compensation.
“While I consider that it was right to reach that conclusion, I also consider that the FCA could have specified more clearly the evidence which it considered was missing.”
He has recommended the FCA writes to the complainant setting out the following factors: that it is prepared to consider further the claim for compensation for loss, the evidence it requires, the assumptions it would use to calculate a payment if it receives evidence, and the limitations on making a payment.
Townsend says: “I have some sympathy with the FCA’s position that, despite requesting evidence to demonstrate direct financial loss, Company C had not supplied sufficient evidence. However, I consider the FCA might have made it clearer what evidence was required.”
In its response to the Complaints Commissioner report, the FCA says: “The FCA has noted that the commissioner agrees with the FCA in his findings and accepts the recommendations. The FCA will write to the complainant with the requested information.”
The commissioner did not uphold the part of the complaint related to the length of time it took the FCA to investigate.