Around 40 per cent of online unauthorised firms subject to recent FCA warnings still have active websites, Money Marketing research can reveal.
Since the FCA replaced the FSA in April it has published 142 warnings to consumers about unauthorised firms to avoid, including pension-unlocking firms, carbon credit trading and clones of genuine financial services firms.
Money Marketing research, conducted last week, of the most recent 100 warnings finds that 74 of the firms used a company website to promote themselves online and, of this number, 31 still have active websites.
Regulation experts warn the FCA has an uphill battle in attempting to crackdown on unauthorised firms, particularly when the firm is based offshore.
PwC partner and former FSA chief operating officer David Kenmir says: “It is a worrying area for society, as a lot of financial crime these days originates via the internet. Clearly it is very easy to establish a business, real or otherwise, in a matter of hours. This is likely to a growing problem.”
Unauthorised firm warnings appear on a section of the FCA’s website. However, compliance expert Adam Samuel says the vulnerable consumers usually targeted by such firms are unlikely to check the regulator’s site. “It is Joe Public, those not very interested in engaging with financial services, who is going to get taken for a ride here,” he adds.
Essential IFA managing director Peter Herd says: “Unauthorised firms are costing consumers millions and I just don’t think the FCA is doing enough to stop them. When I have spoken to the regulator about specific firms they have told me they don’t have enough resource to deal with this issue, which is really worrying. The regulator needs to be doing more to close these firms down.”
An FCA spokesman says: “We use our criminal and civil powers to take action through the courts to stop those firms and individuals who pose the greatest harm to consumers. We take seriously all information we receive about unauthorised firms operating in the UK and targeting UK consumers.”
Is the FCA doing enough to tackle unauthorised firms? p.8-9
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