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FCA foots bill for mismanagement of FSA case with advice firm

The FCA has accepted a recommendation from the Complaints Commissioner to pay £1,500 in compensation for its handling of an FSA case in the Upper Tribunal.

In summarising the 1,000-page record of the historic complaint, Complaints Commissioner Antony Townsend says the FCA “seriously mismanaged” the complainant’s case, which it picked up following the disbandment of the FSA.

Townsend’s final report says the FCA’s initial offering of £425 in compensation to the complainant was inadequate given three major failings – a news release verging on being defamatory, registry entry issues and length of time it took to reach a decision.

The first was with regards to a news release issued by the FSA about the complainant’s firm in the wake of Upper Tribunal proceedings in 2014.

A fine of £10,000 was initially imposed on the firm which was appealed unsuccessfully by the complainant in the Court of Appeal, with proceeds concluding in 2017.

Townsend says the release verged on defamatory for the complainant’s firm.

He says: “The release had been significantly misleading and failed to give proper prominence to the fact that the FSA’s decisions at that time were subject to further proceedings.

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“They show a disturbing disregard for accuracy as well as a disregard for the complainant’s rights, coupled with procedural incompetence.”

Townsend also highlights the FSA’s initial “blanket denial of the complaint and its failure to apologise until prompted.”

The second was the FCA’s mismanagement of changes to the firms’ appearance on its register after court proceedings concluded and by which time the FSA had been dissolved.

The complainant’s firm was incorrectly listed as “banned” on the FCA register, according to Townsend.

This part of the complaint was upheld by the FCA when first presented.

Townsend says: “I am satisfied the FCA’s explanation was accurate and I welcome its candour, but it did not answer the question of why the error occurred. Email exchanges suggest there was a degree of confusion between [the FCA] enforcement operations and the enforcement legal group.

“It is clear that the handling of this situation was shambolic in that there was no proper understanding of policy and opportunities to correct the mistake were missed.”

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The third failing relates to the confusion in handling the complainant’s later complaint about the length of time taken to reach a decision.

Townsend says a series of communications between late 2017 and March 2018 regarding owed monies from the court proceedings culminated with the FCA missing several response deadlines.

He says: “The FCA had another attempt at formulating the complainant’s complaint on 23 May 2018. This time, it excluded another part of the complaint – that the FCA had failed to fulfil undertakings made to the court – on the grounds that that should have been dealt with in the court.

“The complainant objected to this revised formulation and in August 2018, it became apparent to the FCA that the complaint you had made in November 2017 about the had also not been responded to.

“In the same month, the complainant sought my help and in September 2018, they received an apology from the FCA for the fact that the FCA ‘could have done more to progress your complaint sooner’, and for the delay in dealing with your complaint about the delay.”

The final decision of the complaint was delayed again in late 2018 before a decision was handed down in February this year.

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This included an offer of a £175 payment for delays in processing complaints and a further apology for the inaccuracies in the FSA’s reporting of the historic 2014 case and the incorrect registry filing in 2017.

The complainant says the FCA still failed to investigate its complaints about the tribunal having been mislead by the FSA’s news release and that the £175 goodwill gesture payment was not high enough.

Townsend says: “The extent of the delays was indefensible. Deadlines were missed, and far too much time was spent on amendments to the definition of the complaint, excluding elements of the complaint at different stages, rather than tackling its substance.”

The complainant subsequently also challenged the FCA over money they were due to pay at the conclusion of court proceedings.

The money should not have been owed given outstanding complaints about the incorrect register entry alongside the complaints about the court proceedings themselves dating back to 2014, the complaint added.

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Townsend says: “The problems seem to have arisen because two FCA departments were dealing with related matters and it appears that the FCA failed to resolve this issue, but continued to pursue the debt.

“It appears from the papers that there was no record that the complainant’s correspondence with the finance team had been satisfactorily concluded, and in those circumstances, it seems to me that the FCA ought to have considered whether or not your interactions with finance had been satisfactory.

“Whether or not you were right in claiming that the proceedings should have been stayed is beside the point: the complainant should have had a response to your complaint.”

Townsend concludes: “I recommend that, in place of the initial offer, the FCA offers you a compensatory payment of £1,500 for the substantive failures [and] I am pleased to say that the FCA has accepted this recommendation.”

In a response to the commissioner’s findings, the FCA says: “We have accepted the recommendations made on this complaint. We have written to the complainant to apologise and offered an additional ex gratia payment.”


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

  1. What do they care? It’s not their money after all.

  2. Poor FCA picking up the tab for someone else’s mistakes, eh?

    No. These mistakes are entirely the doing of the same body, now named the FCA.

    Firstly, contrary to what your report says, the FSA was never “disbanded” or “dissolved”. The FSA, being Company no. 1920623, was merely renamed as of April Fools’ Day 2013. The corporate body, and the same staff, were handling his matter on 02 April 2013 as we’re handing it on 31 March 2013, from the same office.

    Secondly, check the facts of the case: 2 of the 3 matters complained of occurred after 2013 i.e. after the FSA had been renamed the FCA.

    So no. This is the Authority paying a small amount of redress for its own wrongdoing. Nothing more, nothing less.

    • As you say MIB, all their failures. Failures by people with no skin in the game who probably come out of this with NOTHING on their future bank employers reference against them and not having to pay a penny of the compensation to cover the upset caused.
      Arrogance and superiority complexes or just plain incompetence, neither of which are acceptable are rewarded with good salaries and no personal risk.

  3. guys we have said this all for years and I appreciate what you say but it needs some one to stand up for us and say enough is enough we are not paying for these failures as it has nothing to do with our business

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