The UK’s top financial watchdog investigated 47 unauthorised businesses in 2020, ensuring the return of almost £6m to consumers.
The Financial Conduct Authority (FCA) also obtained court orders demanding that firms return over £14m to consumers or risk the regulator taking things further.
The news were unveiled in the FCA’s recent update about what it has done to prevent harm to befall consumers in the UK over the first ten months of 2020.
It also included issuing fines totalling more than £80m to regulated firms and individuals who have caused consumer harm over the course of 2019 and 2020.
The City watchdog also stopped applications for authorisation from 343 financial services firms and individuals, where the potential for consumer harm was identified which represented almost one in ten applications.
Additionally, the regulator opened over 1,500 supervisory cases involving scams or higher risk investments, and received over 24,000 reports of unauthorised activity and published over 1,000 consumer alerts – an 82% increase on the previous year.
“The UK has one of the world’s leading financial services industries, offering consumers access to a wide range of investment products,” said Sheldon Mills, executive director, consumers and competition.
“In some areas however, the consumer investment market is not working as well as it should and too often consumers are offered unsuitable products or advice. Protecting consumers and ensuring they have confidence in the suitability of advice they receive is a key priority for the FCA and today’s report highlights some of the work we are undertaking to achieve this.
“Incorrect or out of date permissions increase the risk of harm to consumers as they can mislead consumers about the level of protection offered or give credibility to unregulated activities. This is why we’re today calling on firms to review their permissions and ensure they reflect current business models. We will take action where we consider out of date permissions may cause harm to consumers. The message is clear, use it or lose it.”
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