Mousey
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Post by Mousey on Feb 15, 2022 12:23:42 GMT
The Complaints Commissioner's final report into the FCA's oversight of LCF has been published: frccommissioner.org.uk/wp-content/uploads/The-Complaints-Commissioner-Final-Report-LCF-15.02.2022.pdfJust having a skim through, a couple of things initially point out: "If investors were led into thinking they were investing in a safe product because of FCA authorised status (which was not the case) and there were no warnings displayed regarding the risks associated with unregulated products I struggle to see how the Register subsequently could not appear to be misleading." "The appearance of LCF’s Register entry encouraged investors that LCF had a badge of respectability. Information was also not presented in a manner which was intelligible to the public." |
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keystone
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Post by keystone on Feb 15, 2022 13:50:57 GMT
The FCA has asked me to have regard to the wider implications of an approach
to ex gratia compensation which would generally lead to the FCA paying
compensation when it is not the primary cause of the loss. My only
recommendation is that the “sole or primary cause” test be abrogated, and the
position under the Complaints Scheme be restored. That will not necessarily
lead to the FCA “generally” paying compensation when it is not the primary
cause of the loss; it simply means that decisions about compensation will need
to be made in accordance with the terms of the Complaints Scheme. To the
extent that this leads to more payments of compensation than has previously
been the case, then that is simply the result of an application of the Complaints
Scheme which has been in place since 2001.
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keystone
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Post by keystone on Feb 15, 2022 14:02:01 GMT
Consistent with 2019/20, the FCA’s current liabilities more than match available cash balances at 31 March 2021 and the existing fixed assets are not convertible to cash. 10 Paragraph 20(3) of Schedule 1ZA FSMA sets out the narrow scope of what constitutes the FCA’s ‘enforcement costs’ 11 As explained in the Financial Penalty Scheme, the FCA will apply retained penalties, received in any financial year, as a rebate to the periodic fees paid in the following financial year by certain authorised firms. See Annex 2 to PS21/7: www.fca.org.uk/publication/policy/ps21-7.pdf. 171 37. The consequence is that the FCA would not be able to make any significant
compensation payments without raising significant further funds. |
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p2pfan
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Post by p2pfan on Feb 15, 2022 17:08:31 GMT
Thank you for sharing this report.
It demonstrates a litany of failures by the FCA. To give one example out of many, on page 117 it lists some of the times the FCA was contacted about LCF misleading investors on its website and its advertisements. All the FCA did in those incidences was contact LCF, who sometimes made the necessary revisions to the copy on their website or in their ads.
LCF kept breaking the rules for years, with impunity and with the FCA take no action.
As the 'Conclusion' section on page 118 therefore states:
"we made errors in our approach to LCF’s financial promotions. These errors included not considering LCF’s business
holistically by failing to consider whether LCF’s repeated breaches of the FCA’s financial promotions
rules were symptomatic of a more serious problem. Furthermore, our policies in respect of
intervention in cases of breaches of the financial promotion rules were too cautious. On that basis I
uphold this allegation."
As with a number of P2P platforms that have gone bust, the FCA's repeated failings have ended up costing Brits tens of millions of pounds.
I'm certain there are countless P2P platforms right now who are running an extremely shabby operation in contravention of FCA and other strictures, but we will only ever find out when they suddenly close down, the Directors fly into the sunset with a big grin on their faces having made hundreds of thousands if not millions of pounds and lenders like us are left to pick up the pieces having lost our shirts.
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