The speed read:

  • FOS annual review published
  • Go ‘inside the FCA’ with the regulator’s podcast
  • FCA publishes decision notices against three firms and five individuals

FOS annual review published

The FOS annual review shows that 2018/19 was the busiest for five years, with more than 388,000 complaints received. Complaints about consumer credit increased by 89%, following a 40% increase the year before, with many consumers struggling with unsustainable debt. Another source of significant complaints volume was instances of IT failures. When dealing with these complaints and any potential compensation due, firms must consider the impact on individuals. The Ombudsman also received its two-millionth PPI complaint and is prepared for an uptake in enquiries as the deadline approaches.


Go ‘inside the FCA’ with the regulator’s latest podcast In the first of a new series of ‘inside the FCA’ podcasts, Chief Executive Andrew Bailey offers his thoughts on the future of conduct regulation. We bring you the key takeaways. Brexit is creating uncertainty within the regulator, with Andrew Bailey highlighting that the regulator had believed that there was a reasonable chance that the outcome of Brexit would have been determined prior to the release of the 2019/20 Business Plan. As this is not the case, the FCA is having to go back over some of its plans in order to ensure it is able to balance its work around Brexit with its other priorities. He believes this process of re-evaluating and redefining the regulatory approach will categorise the regulator’s work over the coming months. The regulator is also engaged in important work to determine what the future approach to regulation will look like, and its impact on consumer protection. On the issue of a formalised duty of care, he notes that the majority of respondents recognise that a legal statutory duty of care would be challenging to implement, but there is a clear message that many believe the regulator could do more to ensure consumers are treated fairly. Operational resilience is another key part of protecting the UK financial system and it’s important that firms take the responsibility of future-proofing their systems and technology seriously. It’s an ongoing process, but the regulator expects firms to do everything in their power to mitigate those risks, including implement a range of testing. Mr Bailey sees some significant changes on the horizon for conduct regulation as the financial landscape continues to evolve so rapidly. The next stage of the Brexit negotiations will help shape the future as both parties seek to determine the future relationship between the UK and EU. There are also significant challenges not connected with Brexit, including the impact of intergenerational issues, which the FCA has recently published a discussion paper on.


FCA publishes decision notices against three firms and five individuals

The FCA has published decision notices against three firms and five individuals following an investigation into unsuitable pension switches and transfer advice. The three firms involved advertised their service as independent, whole of market pension reviews and advice. However, key functions were outsourced to unauthorised third parties and clients were often recommended illiquid, highly unsuitable pension switches and transfers. Clients invested £76m of their pension assets with these three firms and the FSCS has, to date, paid out £26.8m and is still investigating a number of claims. It is the opinion of the FCA that the directors acted recklessly and ignored the obvious risks associated with their services and recommendations. They also provided false and misleading information to the regulator. One of the individuals was not approved by the FCA to act in his capacity as director. He also took deliberate steps to influence the information the regulator received and encouraged the withholding of key information.