Firm loses appeal against publication of investigation

Promethean Finance appealed to the Upper Tribunal against the FCA’s decision to publish its decision to cancel the firm’s permission. The firm had become authorised as a debt packager business providing debt advice, and would generate revenue through commissions from debt solution providers to whom it referred customers. When the FCA changes its rules resulting in these referral commissions no longer being allowed, it asked the firm what action it proposed to take. The firm said it would issue a claim for judicial review of the FCA’s decision to ban the fees, but the High Court refused permission to bring a claim and ordered Promethean to pay £15,000 towards the FCA’s costs. Despite agreeing a schedule for payment, the firm had not made any payments at the date of the hearing.

The FCA had continued to engage with the firm on its business plans, and ultimately received information that revealed the firm was insolvent with substantial short-term liabilities, and most of its income (and its future projections) related to its ARs. The FCA asked how the firm intended to address its liabilities, and invited it to cancel its permissions. Ultimately the FCA did decide to cancel the permissions on the basis the firm did not satisfy the threshold conditions.

The FCA decided to publish the decision, and this is not a decision the Tribunal can consider on referral. However, it can ban publication if it is satisfied that it might cause serious harm to the person on question or any other person. Where this may be appropriate, the onus is on the applicant to show a real need for privacy, providing cogent evidence of how unfairness may arise and how it could suffer a disproportionate level of damage if publication was not prohibited – and that this would be an inevitable consequence. Risk of damage to reputation would be unluikely to be sufficient.

The firm made many challenges to the decision notice, and the Tribunal held that it would not tell anyone anything that was not already publicly available. The firm had not shown that publishing the notice would cause the destruction of its business or some other harm that might make it unfair to publish, and the application was dismissed. The Tribunal noted that, if the separate references resulted in a successful challenge to the decision notice as a whole, then this would take away any negativity that arose from publishing the notice in the first place.