Financial Services Mis-Selling – The FCA taking action
The Financial Conduct Authority (FCA) have never been more committed to tidying up the financial services industry.
The FCA have announced that they DE-AUTHORISED 1,261 firms last year (23/24), that’s double the previous year, so what does this mean for UK customers making claims for compensation or redress?
In short it means that they are tidying up the industry by preventing 1,261 firms from being able to trade in financial services in the UK. However, if you were a client of any one of those 1,261 firms, then you should probably investigate whether you may be due financial compensation or Claims against financial advisers.
21 Individuals (not companies) have been charged with financial crimes which means they face criminal prosecution however this rarely leads to any further compensation going to their victims.
What do the FCA regulate?
The Financial Conduct Authority (FCA) in the UK regulates a wide range of financial products and services for example –
Regulated Products that we as regulated solicitors who specialise in financial mis-selling handle a lot of claims for:
– Pensions
– Loans
– Investments
Regulated Services we focus on include:
– Financial Advisers (investment, pension, mortgage advice)
– Wealth Management & Investment Management
– Pension Scheme Management
For your information, we have included a list of all the products and services that the FCA regulates further down in this article.
When you are the victim of mis-selling or professional negligence by an FCA regulated company (think about the PPI scandal) then the regulator have the power to act. In some cases (like PPI) they will demand the company pays compensation to their customers however in the majority of cases we need to bring your complaint to the company and if we are not happy with their response then we can escalate it to the Financial Ombudsman Service and if necessary, pursue compensation through the courts.
What if the firm has gone out of business?
We are very fortunate in the UK that we have the Financial Services Compensation Scheme (FSCS). This is a lifeboat fund which is there to make reparations for consumers who have lost money due to mis-selling or professional negligence on the part of regulated parties.
However, the FSCS have limits to how much compensation they can pay, so in many cases people forced to apply through the FSCS do not get the full compensation that they are entitled to.
As solicitors who specialise in claims against financial advisers and pension providers where the claims often exceed the FSCS limits, we sometimes make multiple claims against multiple financial advisers and pension providers including pursuing financial adviser claims and pension mis-selling claims through court if it is the best way to get you the full compensation that you deserve.
How far back can you go to make a claim?
The simple rule of thumb is 6 years from the time of event or 3 years from the point of knowledge that you can make a claim, however the longer you wait, the less options we have in terms of how we can go about pursuing your claim.
If you feel you may have been a victim of financial mis-selling or professional negligence from a regulated company but aren’t sure where to start, we offer a free, no-obligation consultation. Why not reach out today to discuss claims against financial advisers and find out how much you may be due in cash compensation or redress?
Below is a list of all the products and services that the FCA regulates.
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Products
- Savings accounts (including ISAs)
- Mortgages
- Credit cards
- Loans (personal, business, payday loans)
- Insurance products (home, car, travel, life insurance)
- Pensions(personal and workplace pensions)
- Investment funds (mutual funds, ETFs)
- Bonds (corporate and government)
- Equities (stocks and shares)
- Cryptocurrency-related products (limited regulation in terms of anti-money laundering)
- Derivatives (options, futures, CFDs)
- Annuities
- Consumer credit products
- Payment services (including e-money providers)
- Peer-to-peer lending platforms
- Crowdfunding platforms
- Collective Investment Schemes
- Buy Now, Pay Later (BNPL) schemes
Services
- Financial advice (investment, pension, mortgage advice)
- Wealth management and investment management
- Brokerage services (stockbrokers, forex brokers)
- Insurance brokers
- Claims management companies
- Asset management firms
- Payment service providers (e.g., PayPal)
- Credit reference agencies
- Debt management and debt collection services
- Financial market exchanges (e.g., London Stock Exchange)
- Investment banking services
- Fund management services
- Money remittance and transfer services
- Securities trading and settlement services
- Pension scheme management
If you are unhappy with a company who fall into any of the above categories then we want to hear from you as we may be able to help you get the compensation or redress you deserve.
FCA Key Actions and Progress
The Financial Conduct Authority (FCA) has taken significant strides in strengthening consumer protection, beginning with an overhaul of the financial services register. This improvement empowers individuals to confidently check whether a firm they’re dealing with is legitimate and properly authorised, particularly in cases of financial mis-selling, ensuring safer financial decisions.
Awareness among firms regarding the FCA’s power has surged, with 78% now recognising the regulator’s ability to revoke permissions, and 94% understanding the minimum requirements for authorisation. This highlights the increasing pressure on companies to comply with regulations or face consequences.
One of the most notable developments this year was the FCA’s refinement of its redress framework, which places the financial burden of compensation on firms responsible for misconduct. Nearly 100 lenders were ordered to provide £60 million in compensation to around 270,000 customers facing financial distress, illustrating the FCA’s commitment to justice.
The regulator’s resolve was also evident in its handling of high-profile cases, such as the LF Woodford Equity Income Fund collapse. Over 250,000 investors will see up to £230 million in compensation secured by the FCA. Similarly, the steelworkers misadvised to leave the British Steel Pension Scheme are now on the path to financial recovery, thanks to the FCA’s intervention.
To pre-empt future misconduct, the FCA proposed rules requiring personal investment firms to reserve more funds for potential redress claims, reducing the need for the Financial Services Compensation Scheme (FSCS) to step in. This has already led to a substantial reduction in the levy firms contribute to the FSCS, dropping from £625 million to £270 million in the past year.
In addition to these measures, the FCA cracked down on claims management companies for misleading consumers, investigating 26 firms. Many of these companies have since either reformed their practices or abandoned unregulated activities, marking another step forward in consumer protection.
So many of the our customers were oblivious for years that they had been mis-sold and have lost money as a result. If you have any concerns even if it is as simply as, you haven’t received regular communication from your financial services company for some time, book a call with one of our financial mis-selling experts today.
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