The latest edition of Ombudsman News highlights: what FOS is doing to prepare for the Consumer Duty; the annual complaints data from 2022/3; its items on hybrid scams and escape of water in unoccupied properties...
Category - Enforcement & Litigation
Emma RadmoreFSM Bill gets Royal Assent
As expected, the Financial Services and Markets Act 2023 got Royal Assent on 29 June. Heralding it, Treasury described its key features as: bringing the ability to tailor financial services regulation to fit UK markets...
FOS warns of “hybrid” scam increase
FOS has noted that the number of complaints it receives about scams generally is increasing – with a 17% increase in APP fraud complaints, but also a higher proportion of “complex” scam complaints, for...
FSM Bill completes Parliamentary process
The FSM Bill returned to the Lords for consideration of the few amendments the Commons had made. These were agreed, and so the Bill has completed its Parliamentary passage and now awaits Royal Assent. It is expected to...
Tribunal overturns FCA redress scheme imposed on Bluecrest Capital Management
The Upper Tribunal (Tax and Chancery Chamber) (the “Tribunal“) has upheld an application by Bluecrest Capital Management (UK) LLP (“Bluecrest“), an investment manager, to summarily strike out a...
Stephen WilsonFOS comments on Nationwide Fairer Share Payment scheme
FOS says it’s received requests to investigate complaints about the Nationwide’s Fairer Share Payment scheme which awards £100 to certain members who meet published eligibility criteria. FOS says that it is...
FCA publishes BSPS adviser fines and information page
FCA has updated its website to include details of its approach to investigations into firms and individuals who provided unsuitable advice in the context of transferring out of the British Steel pension scheme –...
FCA and SFO publish MoU on enforcement co-operation
FCA and SFO have published their MoU setting out their intentions to cooperate in relation to new investigations, intelligence developments, investigations and prosecutions. The ‘Principles of Co-operation’...
Laura WilesBoE updates on CHAPS APP plans
The Deputy Governor of BoE has written to the Treasury sub-committee on Financial Regulation to update on progress on protection from APP fraud within the CHAPS system. The letter confirms the BoE’s intention to...
BoE speaks on enforcement approach
Oliver Dearie has spoken on the rationale behind the proposed changes to the way in which BoE is looking to change its approach to enforcement. He said the proposals reflect lessons learned over the past decade and...
Lords passes FSM Bill
The FSM Bill has had its third reading in the Lords, and has been passed and returned to the Commons as amended in the Lords. The Commons now needs to consider the Lords’ amendments, and, if all is agreed, the...
CFD customer loses “appropriateness” case against broker
In the case of Robert Day v Forex Capital Markets Limited, Mr Day had signed up as a customer with FXCM effectively to place spread bets on US oil futures. Over a short period he lost significant sums and argued that...
Tribunal gives preliminary ruling on Havilland/Final Notice reference
The Tribunal has published its decision on the preliminary issue relating to the Bank Havilland action, under which David Rowland referred all notices to the Tribunal on the basis they contained statements prejudicial...
FOS publishes annual complaint data stats
FOS has published the annual complaints data for the 2022/23 financial year and commented on the common themes. Of the most complained about products current accounts had a 40% uphold rate; credit cards 34%...
Tribunal disagrees with FCA on JBI individual bans
The Upper Tribunal has published its decision in relation to FCA’s decision to ban 3 individuals working for Julius Baer International for lack of integrity, following its finding that JBI had breached its rules...
FCA starts criminal proceedings for unauthorised SRB schemes
FCA has started criminal proceedings against 3 individuals, 2 of whom worked together, in relation to the offering of loans and sale and rent back agreements without being authorised to do so. It has also charged 2 of...
FSMB Lords Report stage day 2
Day 2 of the Report stage for the FSM Bill took place on 8 June. In the first session, the Lords debated clauses including those on: reporting requirements under the competitiveness and growth objective, a Government...
FCA takes action against 3 more firms for BSPS settlement offers
FCA has taken action against Alpha Financial Services, QED Financial Associates and Harvest Associates, all of whom had made unsolicited offers of between £50 and £300 to over 90% of their clients, who had not yet...
FOS highlights Morses Club scheme of arrangement
FOS has updated its website to reflect the court’s approval for a scheme of arrangement between Morses Club and its creditors. Morses Club was the UK’s largest doorstep lender, which had increasingly faced...
FCA urges “do the right thing”
Therese Chambers has spoken on the importance of people in the financial services sector doing the right thing on a day to day basis, and how well run firms will achieve better outcomes for their clients. She noted some...
FOS blogs on escape of water claims
A blog from FOS looks at the increase it has seen in queries from insurers about “escape of water” claims in unoccupied properties. FOS notes that key points to check are: how the policy describes...
FCA updates information on WealthTek administration
FCA has updated its website with details of the progress of the investigations into WealthTek LLP and its principal partner, John Dance. FCA continues its regulatory and criminal investigation into both, including into...
CMA finds provisional breach in bond information sharing
CMA has provisionally found that Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada each unlawfully shared competitively sensitive information in one-to-one Bloomberg chatrooms. It found the breaches...
UK and EU publish draft MoU on FS cooperation
The UK and EU Commission have published their draft MoU on regulatory cooperation in financial services. The draft is still subject to the internal processes of the EU, but both parties intend to sign it shortly. The...
FCA takes further action on BSPS advice and offers
FCA has taken action against a third firm that had made unsolicited offers to clients who had been BSPS members. David Stock & Co offered £50 to clients who had not yet complained. FCA has imposed requirements on...
FCA gets distribution orders on investor scams
FCA has obtained 2 orders that will return over £130,000 to victims of unauthorised business scams: in relation to an unauthorised collective investment scheme set up and operated by Synergy Lands Group Limited between...
FOS publishes discrimination complaints guidance
FOS has published an information page for firms dealing with complaints relating to discrimination. Complaints include: that financial services providers have not made reasonable adjustments to take account of a...
FCA speaks on regulatory response and changing threats
Sarah Pritchard has spoken on the future of non-financial risk and control across the 3 Lines of Defence. She discussed: FCA’s campaign to warn finfluencers against promoting illegal or inappropriately risky...
FCA issues public censure to firm over pension transfer advice failings
FCA has issued a public censure to Lighthouse Advisory Services Limited following a finding of serious failings in relation to defined benefit pension transfer advice, especially in relation to BSPS. It found several...
Judicial review application dismissed on timeshares and CCA deemed agency
The High Court has handed down its judgment on the regulatory environment surrounding the sale of timeshares. FOS receives many complaints about misselling of fractional ownership of timeshares and selected two cases to...
FCA and police act on more illegal crypto ATMs
Following previous initiatives, FCA and relevant police units have inspected sites in Exeter, Nottingham and Sheffield suspected of housing illegal crypto ATMs.
FCA publishes Q1 fin proms data
The Financial Promotions data from Q1 2023 shows that 2235 promotions were amended or withdrawn as a result of FCA intervention. Nearly half of these were identified by FCA’s own proactive monitoring and almost...
FCA publishes Decision Notices on bank and employees
FCA has published Decision Notices in respect of Banque Havilland and 3 of its employees for acting without integrity by creating and disseminating a document which contained manipulative trading strategies aimed at...
BoE consults on approach to enforcement
BoE has published a consultation paper on its approach to enforcement. In particular, it proposes making a number of amendments to existing documents, creating a consolidated set of statements of policy entitled...
Tribunal finds against FCA on individual fine/ban
The Upper Tribunal has published its decision in Markos Markou v FCA. FCA had decided to fine Mr Markou £25,000 and ban him. Mr Markou was sole director of a small mortgage and insurance intermediary (FSE). After a...
FCA publishes aggregate complaints data for H2 2022
FCA has published its overview of complaints in the second half of 2022. Overall it found: a decrease of 6% in complaints compared to H1, largely due to decreases in complaints about banking and credit cards, insurance...
FCA announces Woodford redress plans
FCA has announced that Link Fund Solutions has agreed a redress payment to investors in the LF Woodford Equity Income Fund of up to approximately £235m. The Link Administration Group will make a material contribution to...
FOS updates on wider implications framework
FOS has updated its website on how it works with other organisations to assess issues that can have a wider impact across the financial services industry. The members are FOS, FCA, FSCS, The Pensions Regulator and MaPS...
Court considers time limits for PPI referrals
In the case of the Official Receiver and Shop Direct Finance Company Limited the Court of Appeal considered the time limit for referring complaints to FOS in respect of missold PPI, in particular where a person to whom...
FCA places restrictions on senior manager
FCA has imposed several conditions on Lisa Campbell as senior manager of Campbell & Associates Independent Financial Advice Limited. Mrs Campbell had failed to comply with restrictions FCA imposed on the firm in...
Government publishes paper on whistleblowing framework review
Government has published a policy paper on its review of the whistleblowing framework terms of reference. The review will examine the effectiveness of the framework in meeting its original objectives under the Public...
FOS feeds back on reporting “proactively settled” complaints
FOS has published a Feedback Statement in response to its March 2023 consultation on temporary changes to outcome reporting in business-specific complaints data. FOS was seeking a longer-term or permanent way to...
FCA updates on pension transfer redress calculations
FCA has updated its rules and guidance on calculating pension transfer redress, both to correct an error in the CPI stated and to clarify its rules on consequential losses and the valuation date.
Treasury and FCA to update criminal market abuse regime
Treasury and FCA have completed their review of the criminal market abuse regime and have concluded that there are a number of areas in which it would benefit from an update. The criminal regime has barely been updated...
FOS publishes H2 2022 complaints data
FOS has published data on complaints received between July and December 2022. It saw a slight increase in complaints over the first half of the year, and received nearly 80,000 new complaints. It upheld 34% of...
BBRS SME Liaison Panel closes
Antony Townsend has resigned as Chair of the BBRS SME Liaison Panel, saying it has been very difficult for him to make progress and he has been disappointed at some of the BBRS responses to the Panel’s concerns...
FOS updates award limits
FCA has confirmed new limits for FOS awards, effective from 1 April. These are: £415,000 for complaints referred to FOS on or after 1 April 2023 about acts or omissions by firms on or after 1 April 2019; £190,000 for...
OFSI updates penalties guidance
OFSI has updated its guidance on assessing sanctions breaches to include how it assesses penalties where there has been an incorrect assessment of ownership and control of an entity. The additions to the guidance...
FCA calls for input on SME access to FOS
The FCA has launched a call for input to ascertain whether the thresholds for SMEs to be able to refer complaints to the FOS remain appropriate. The FCA’s policy objective is to provide access to the Ombudsman...
FIN. TeamFCA issues Supervisory Notice to Roark Holdings Ltd
FCA has issued a Supervisory Notice to Roark Holdings Ltd varying the firm’s authorisation under the PSRs 2017 by imposing restrictions on its business due to the firm’s failure to inform the FCA of a major...
FCA takes further action on crypto ATMs
FCA has undertaken an exercise with the Metropolitan Police which has resulted in the discovery of several illegally operating crypto ATMs in East London. FCA is now working with the National Economic Crime Centre to...
Ombudsman News highlights Business Support Hub
The latest edition of FOS’ Ombudsman News covers the consultation featured separately in FIN on the reporting of business-specific data, and discusses how the formerly known “technical desk” has now...
SME liaison panel gives BBRS views
Antony Townsend, Chair of the SME liaison panel, has responded to the BBRS Post Implementation Review. The panel is pleased the report recognised the issues the scheme faced. However, the panel is concerned that the...
FCA publishes anonymous warning notices
FCA has published a “warning notice statement” which discloses that it gave two individuals warning notices in September 2022 of its intention to fine them in respect of conduct between 1 October 2015 and 31...
Treasury Committee unimpressed with scam reimbursement proposals
The Treasury Committee has described the proposals for the PSR to require banks and building societies to fully reimburse victims of APP scams where the loss is over £100 as “half baked”. The Treasury Sub...
FOS consults on business-specific data publication
FOS is consulting on a longer-term or permanent way to incentivise businesses to settle complaints pro-actively before FOS issues its opinion. The consultation follows an initiative FOS launched for a short time in late...
Firm application for JR of FOS decision rejected
Charles Street Securities Europe LLP had applied for judicial review of a FOS decision. FOS had upheld a complaint made by a retired businessman against the firm. The client had originally signed an agreement with the...
Parliamentary group looks at business banking redress
An All-Party Parliamentary Group has published a report looking at compensation schemes for business banking. The report notes that bespoke ad hoc schemes have been established following specific banking scandals but...
Regulators update Regulatory Initiatives Grid
The Financial Services Regulatory Initiatives Forum has published the sixth edition of the Regulatory Initiatives Grid. The edition was due last November, but has been held back to allow the regulators to consider how...
Court requires FOS to review decision
The High Court has taken the relatively rare step of ordering FOS to review a decision. The complainant, Mr Moniak, had been a customer of Barclays. Following an inheritance in 2010, a total of £500,000 was paid into...
FCA updates on Link action
FCA is in discussions with the Link Group and Link Fund Solutions over whether its proposed enforcement action against LFS can be resolved by agreement – specifically, that consumers affected by the suspension of...
Latest FOS data shows rise in complaints
FOS has published its complaints data from Q3, 2022/23, which shows a rise of 6,000 in new complaints, with the most significant rise relating to running account credit but current accounts are still the most complained...
FCA censures Amigo for inadequate affordability checks
FCA has publicly censured Amigo Loans Ltd following a finding that it did not have appropriate processes in place to assess borrower and guarantor circumstances before granting loans for a period of around 18 months...
PSR consults on reporting of APP scams
PSR has issued a consultation on guidance to help PSPs to provide the right data when reporting APP scams to the regulator. The first collection is coming soon, with firms’ submissions due in May, with the first...
FCA seeks redress for unauthorised firm investors
FCA has started High Court proceedings against Argento Wealth Limited and its sole director, Daniel Willis. It alleges the firm unlawfully took around £2.8m as deposits under loan agreements and/or as part of an...
FCA publishes supervisory notice on high-cost lender
FCA has published a “further first supervisory notice” to Indigo Michael Limited, a high cost consumer credit lender. It first imposed a notice on the firm in July 2022, and now requires that: the firm must...
HSBC breaches retail banking order
The Competition and Markets Authority (“CMA“) has written to HSBK UK Bank Plc concerning its breaches of Part 2 of the Retail Banking Market Investigation Order 2017 (the “Order“). Part 2 of the...
FCA places restrictions on 2 advisory firms
FCA has imposed restrictions on Nexus Independent Financial Advisers Limited and Nexus Investment Managers Limited that prevent the firms from carrying out any regulated activities and restrict access to their assets. ...
FSMB second day of Lords’ Committee hearing
The second day of debate in the Lords’ Grand Committee consisted of a lively debate on several proposed amendments, none of which have been taken forward. Topics debated were: creating offences for abuse of...
Court holds “debtor” must be contractual party
The Court of Appeal has held that an individual cannot bring a claim under s75 CCA unless they were party to the relevant credit agreement, as otherwise they cannot be a “debtor” for those purposes. In ...
FCA concerned about misleading BSPS redress offers
FCA has become aware that some firms are making unsolicited offers of redress to former BSPS members who have not made complaints. FCA feels this may be a deliberate attempt to exclude former members from the redress...
FSM Bill Grand Committee stage starts
The first day of the Lords Grand Committee hearing on the FSM Bill took place on 25 January. There are now 6 dates scheduled in total, with sittings taking place now on 30 January, then 1, 6, 8 and 20 February. 195...
FCA warns consumers on pre-paid probate plans
FCA has issued a consumer warning on pre-paid probate plans. It has seen increased marketing of these plans, which are not regulated products. Many of them are marketed by pre-paid funeral plan firms that FCA did not...
FCA concerned about consumer harm from coordinating money transfer firms
FCA has used its competition powers to issue a statement of objections alleging that three money transfer businesses coordinated with each other to fix prices for customers in Glasgow transferring money to Pakistan. It...
FCA updates on how to complain
FCA has updated its information page on how to complain about the regulators. The new information notes that complainants need not wait for one complaint to be concluded before starting another but stresses that the...
Complaints Commissioner publishes protocols
The Complaints Commissioner has published the protocols for its relationship with the BoE and FCA. The protocols set out the contact areas within the institutions, the procedure on first receipt of a complaint, and...
BBRS calls for SMEs to register old complaints
The Business Banking Resolution Service‘s “historical scheme” will close to new registrations on 14 February 2023. The scheme covers complaints first registered between 1 December 2001 and 31 March...
Treasury Committee publishes FCA information request
The Treasury Committee has published a letter sent to Nikhil Rathi on 1 December, asking for details on: total vacancies FCA has in specific areas, by grade, job and which ones require data or technology skills; how FCA...
FCA follows restrictions on high-cost lender
FCA has published a First Supervisory Notice in respect of Micro-E C.I.C, trading as Kariba. The firm, a high costs lender, appears to have misused money from loans and does not seem to have sufficient assets to cover...
Lords publishes FSMB amendments for Committee
The House of Lords has published a set of amendments to the FSMB for discussion in the Grand Committee, which is now scheduled to sit on 25 and 30 January and 1 February. The amendments include several amendments that...
FSMB completes second reading in Lords
The FSMB had its second reading in the Lords on 10 January. Baroness Penn, leading for the Government, summarised the importance of the Bill and its overarching aims, which she described as: implementing the outcomes...
Stanford v HSBC – further analysis of the Quincecare duty
We reported on this judgment before Christmas. Now read our more detailed analysis of the judgment and its effects.
Treasury publishes AML and CFT supervision report
HM Treasury has published its “Anti-money laundering and countering the financing of terrorism: Supervision Report 2020-22“. The report addresses the performance of anti-money laundering (“AML“)...
FCA imposes restrictions on investment firm
FCA has published a first supervisory notice to Pello Capital Limited imposing various requirements on it with immediate effect (from the date of its publication on 15 November), as a result of concerns about the...
Supreme Court judgment in Stanford/HSBC case looks at recoverable losses
The Supreme Court has held that, where HSBC actioned instructions that may have been part of a fraud, but which resulted in creditors being repaid, then regardless of whether it had a Quincecare duty and, if it did, had...
Onerous or essential: banks’ duties and APP fraud
Read our article by Stephen Dilley and Rasmita Roy Chowdury, looking at the history and case law relating to banks’ duties and APP fraud reimbursement.
FOS consults on plans and budget
FOS is consulting on its plan and budget for 2023/24. As part of the consultation, it asks: what volumes and trends it should be expecting in the areas of banking and credit, insurance, investments and pensions and...
The Edinburgh reforms – and more
See our article, summarising various FIN posts over the past week on the state of play of the FSM Bill and the Edinburgh reforms.
FCA fines Metro Bank for Listing Rule breaches
FCA has fined Metro Bank over £10m and has also decided to fine its former CEO and CFO £223,100 and £134,600 for being knowing concerned in the bank’s breach of the Listing Rules, which involved publishing...
FCA fines brokers for market abuse detection failings
FCA has fined 3 firms within the BGC and GFI group a total of £4,775,200 for failure properly to implement the MAR trade surveillance requirements, which meant there was an increased risk that the firms would not detect...
FCA bans bond traders for market manipulation
The FCA has published Decision Notices banning Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth from performing any functions in relation to regulated activity. The FCA considers that the traders placed large...
FCA fines adviser for unsuitable BSPS advice
FCA has fined Pembrokeshire Mortgage Centre Limited £2,354,331 for giving unsuitable advice to consumers to transfer out of the BSPS and other DB pension schemes. FCA found the firm, which is in liquidation, had advised...
FSM Bill report stage on 7 December
The FSM Bill is to have its report stage and third reading in Parliament on 7 December, after receiving the Bill with amendments from the Public Bills Committee. It is possible for Parliament to make amendments at...
PSR fines for interchange fee breach
The PSR has fined Barclays £8.4m for failing to provide retailers with full information about the costs of its card services. The Interchange Fee Regulation requires banks to provide retailers with transaction...
FCA fines JBI for breaches of Principle
FCA has fined Julius Baer International £18,022,500 for breaches of Principles 1, 3 and 11 at various times between 2007 and 2014. It has also decided to ban 3 individuals – all of whom have taken their case to...
BBRS report highlights complaints themes
BBRS has published its Case Insights report which highlights themes and issues arising from customer complaint data to end-July. The BBRS service was launched in February 2021, and by the end of July 2022, it had...
FCA bans individual
The FCA has banned Carlo Palombo from performing any regulated activity. Mr Palombo was convicted of conspiracy to defraud in respect of fixing EURIBOR whilst an employee of Barclays and was sentenced to 4 years’...
Regulators respond to MP on HBOS investigation queries
Sam Woods (PRA) and Nikhil Rathi (FCA) have written to Kevin Hollinrake MP on behalf of the APPG on Fair Business Banking. The regulators have responded to Mr Hollinrake’s questions following the closure of...
FOS feeds back on future funding
FOS has published feedback following its discussion paper on its future funding. Following comments, it will not take forward some of the options on which it sought views, such as charging professional representatives...
FCA gets judgment against unauthorised mortgage broker
FCA has obtained a judgment against a company, its parent, their director and his father. It found they arranged high-interest, unaffordable bridging loans for vulnerable consumers who were about to be evicted from...