Barclays faces massive PPI lawsuit

A US firm which acquired a credit card business from Barclays is to sue the bank via the High Court for more than £1 billion in damages, in a case which concerns mis-selling of payment protection insurance (PPI).

The case has been brought by CCUK Finance, formerly known as CompuCredit. CCUK, the British subsidiary of a US firm that is now known as Atlanticus, bought Monument, a sub-prime credit card business, from the UK banking giant in 2007.

The deal included an indemnity clause regarding compensation for PPI mis-sold by Monument. Barclays has paid out some compensation for Monument’s PPI mis-selling since the completion of the transaction.

CCUK is now seeking £1 billion in compensation from Barclays, a figure which includes an allowance for interest, plus an additional £60 million for alleged fraudulent representation.

In a statement, Barclays rejected any suggestions of wrongdoing on its part, saying:

“Over the last 10 years we have operated within the parameters of the deal agreed with CompuCredit and believe their recent claims against us are baseless and without merit. We will be vigorously defending our position.”

Only two years after the £390 million transaction had been completed, CCUK decided to close down the Monument business.

Barclays continues to receive tens of thousands of PPI complaints every month, and is likely to continue having to deal with large volumes of complaints right up until August 2019, when a deadline for making a PPI claim comes into force. The bank has set aside £8.4 billion to pay compensation to customers who were mis-sold PPI, and the UK financial services sector as a whole has paid out around £35 billion in compensation to date.

Ahead of the deadline, it is still very much possible to make a PPI mis-selling claim, even if the insurance was sold a decade or more ago. PPI is quite simply the most widely mis-sold financial product ever. It is designed to protect loan repayments should a borrower suffer accident, sickness or unemployment, but around seven million consumers have submitted complaints about the sale of the product, and a significant majority of these have ultimately been successful.

The reasons why PPI may have been mis-sold are varied. Some customers were sold PPI they were unlikely to be able to claim on due to their employment status or medical history. Sometimes PPI was sold without the firm checking that the customer was eligible, or whether they already had adequate insurance. Highly pressurised, target-driven sales cultures were commonplace, and significant numbers of policies were added to customers’ loans without their knowledge or consent.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Payday lenders must now list on comparison sites

New rules are now in force that require all payday lenders to list their products on at least one price comparison site, and the site or sites they choose must also be regulated by the Financial Conduct Authority (FCA). The requirement was first announced back in August 2015 following an investigation by the competition watchdog, the Competition and Markets Authority (CMA), but it only came into force in May of this year.

Lenders must also include on their websites a prominent link to their chosen price comparison site. Wonga, the best-known name in the marketplace, has chosen a site called Choose Wisely to list its offering.

The new requirement will hopefully allow consumers to easily compare the interest and other fees being charged by different lenders, and the CMA also hopes that the move will also facilitate the entry into the marketplace of smaller payday lenders, who can then compete effectively with the larger, more established firms.

The CMA has estimated that the lack of competition within the industry is costing payday loan borrowers an average of £60 per year.

The information lenders must now provide on price comparison sites includes:

• The amount payable in interest, fees and charges, and how these payments will be structured
• The minimum and maximum loan durations that are available
• The incremental lengths of a loan that are available
• The minimum and maximum loan values
• The increments by which loan values can be increased
• The fees and charges for late or missed payments
• The effects of repaying a loan early
• Any other relevant information that would allow a consumer to work out the total cost of a loan

The FCA is currently reviewing the payday loan price cap, which came into force in January 2015. At present, all loans offered by firms who meet the FCA’s definition of ‘high cost short-term credit’, interest are capped at 0.8% per day. This means that a customer borrowing £100 for 30 days and who repays on time cannot be asked to pay more than £24 in interest. No matter how many times a loan is rolled over, or how late the repayments are made, no borrower can ever be asked to repay more in interest and charges than the amount of their loan. The maximum default fee is £15.

Complaints about payday loans have also been increasing significantly. The Financial Ombudsman Service (FOS) will shortly publish its annual review for the 12 months to March 31 2017, but its figures for the year to March 2016 showed a 178% increase in payday loan complaints when compared to the year to March 2015. The FOS is also upholding around two-thirds of the complaints it receives about this type of product.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


What’s in the parties’ manifestos regarding financial services?


• There is no commitment to retaining the ‘triple lock’ – whereby the state pension is guaranteed to rise by the highest of 2.5%, average earnings and the official rate of inflation. Instead pensions will be protected via a double lock, where they are guaranteed to increase by the higher of inflation and the rise in earnings
• The winter fuel allowance for pensioners is likely to be means tested in some way
• Those requiring domestic care will need to pay for this using the value of their homes. However, they will now receive state help when the value of their assets falls to £100,000, compared to the existing threshold of £23,250
• The income tax personal allowance will rise to £12,500 by 2020, with the higher rate threshold increasing to £50,000
• Corporation Tax will be reduced further to 17% by 2020, from the current level of 19%
• The National Living Wage will rise in line with average earnings in every year of the next Parliament


• The triple lock will be maintained, and once the state pension age has risen to 66 in 2020, no further increases are planned
• The National Living Wage will rise to £10 per hour by 2020, and will be extended to all employees aged 18 or over
• A new 50% income tax rate on earnings above £123,000, with 45% tax to be paid on earnings between £80,000 and £123,000
• A new tax on companies paying high salaries, so those with a wage bill of more than £330,000 will pay a 2.5% tax, while those paying more than £500,000 in salaries will be charged at 5%
• Scrapping the ‘family home allowance’ on inheritance tax
• A reversal of all Conservative corporation tax cuts, so the rate will revert to 26%
• An extension of the stamp duty currently paid on share transactions to encompass other assets such as share options
• A ban on banks closing branches where there is a ‘clear local need’ for them

Liberal Democrat:

• The winter fuel allowance will no longer be received by pensioners in the higher rate income tax bracket
• An extra 1% will be added to all income tax bands
• A flat rate of pension tax relief will be considered
• Corporation tax will rise to 20%


• The National Living Wage will rise to £10 per hour by 2020
• Phasing in of a four-day working week, with a maximum of 35 hours per week
• Working towards the introduction of a guaranteed basic income for all citizens
• A tax on high value transactions
• A phased abolition of the cap on employees’ national insurance contributions, which will mean that the wealthiest pay more
• Take advantage of the government-owned Royal Bank of Scotland to create a network of local ‘people’s banks’, providing low-cost basic banking services.


• VAT to be scrapped on domestic energy bills
• The income tax personal allowance will rise to £13,500, with the higher rate threshold increasing to £55,000
• People will be able to retire from age 60 if they are prepared to accept a lower state pension
• The inheritance tax threshold will rise to £500,000, and will be transferable for a married couple or those in civil partnerships, so couples will in effect have a £1 million threshold
• A cut of 20% in the business rates of companies with premises with a rateable value of less than £50,000

Publication of the Scottish National Party manifesto has been delayed after election campaigning was suspended following the terrorist attack in Manchester.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


FCA finds few issues with suitability of advice, but less positive results on disclosure

The Financial Conduct Authority (FCA) has published the results of one of its largest reviews of the standard of advice being given by authorised firms. The regulator reviewed some 1,142 cases from 656 firms, and says that in 93.1% of cases, it believes that the firm’s advice was suitable. In only 4.3% of cases was the advice deemed to be unsuitable, and in the remaining 2.5% of cases the advice was unclear – there was not enough information on file for the reviewer to know for sure whether the advice was suitable.

Where advice was identified as being unsuitable or unclear, the FCA says that the main areas of concern were: whether clients’ risk profiles were being correctly identified, and replacement contracts being recommended where clients were advised to give up valuable benefits and/or incur higher costs without good reason.

The FCA says of the suitability results in general:

“We consider that these are positive results for the sector. We believe they are a result of the successful adoption of the Retail Distribution Review by advisers and reinforced by our previous supervisory and enforcement activities.”

However, the FCA found less encouraging results when it looked at the standard of disclosure in these 1,142 cases. In just over half of cases (52.9%), the FCA considered that its disclosure requirements had been met, however the standard of disclosure was “unacceptable” in a significant minority of cases (41.7%). In 5.4 of cases it was “uncertain” whether the disclosure rules had been complied with.

Disclosure standards were noticeably poorer in smaller advisory firms, in independent advice firms (as opposed to those offering restricted advice) and in directly authorised firms (as opposed to firms who are members of advice networks).

Two specific areas of concern regarding disclosure are mentioned by the FCA in its report: some firms operating an hourly charging structure are not providing clients with an estimate of how long each service is likely to take, and some firms are using charging structures which have a wide range of possible charges.

The FCA did not issue examples of good and poor practice alongside its results, but it does expect to do this over the next 12 months or so.

The regulator also announced that it intends to repeat its suitability review in 2019, when it will assess advice given by firms during 2018.
Linda Woodall, director of financial advice at the FCA, explained how the regulator intended to assist smaller firms to meet its requirements on suitability and disclosure, by saying:
“We will do that through our tried and trusted routes. We have already fed back to individual firms but we have our live and local events and our regulatory round up and other means of communicating with that sector and we will use those.
“We recognise that it is hard for a small firm without a compliance department to get fully up to speed with the regulatory requirements and what they might look like in practice but that’s where we have and will continue with our very comprehensive communication arrangements.”

Ms Woodall did however rule out introducing a mandatory fee disclosure template.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Personal Contract Plans – the new PPI?

Industry commentators are suggesting that some firms authorised by the Financial Conduct Authority (FCA) to conduct credit activities related to motor finance could have to pay significant sums in compensation because of the way they have sold Personal Contract Plans (PCPs).

The FCA’s 2017/18 business plan identified the motor finance sector as an area of concern, commenting:

“We are concerned that there may be a lack of transparency, potential conflicts of interest and irresponsible lending in the motor finance industry. We will conduct an exploratory piece of work to identify who uses these products and assess the sales processes, whether the products cause harm and the due diligence that firms undertake before providing motor finance.”

Data from the trade association the Finance and Leasing Association suggests that 82% of car sales were financed using PCPs in the 12 months to March 2017, with this method of financing largely taking over from more traditional car loans such as leasing and hire purchase agreements. This means that over the year, 800,000 cars could have been purchased using PCPs, and it is also estimated that £40 million has been spent on PCPs since the FCA took over as consumer credit regulator three years ago.

PCPs combine elements from both leasing and hire purchase. The amount borrowed is equal to the expected depreciation in the car’s value over the term. A PCP usually has a term of between two and four years, after which the customer has three options:

• Hand the car back to the dealer
• Make a balloon payment and become the outright owner of the car
• Use any equity they have built up to purchase a new car
The amount of the balloon payment is equal to the finance provider’s estimate of the car’s value, allowing for depreciation. This estimate is made at the beginning of the loan term. If the car’s actual value at the end of the deal was £8,000 and the balloon payment was £7,000, the balance of £1,000 could be used as equity towards the purchase of a new car via the same finance provider.
The main concerns regarding firms’ activities are the lack of adequate affordability assessments on PCP applications, the higher interest payments on PCPs when compared to hire purchase, and also whether firms have been overstating the likelihood of a customer being able to build up equity over the term of the plan.

It’s not hard to see echoes of the payment protection insurance (PPI) mis-selling scandal here. Stories regarding PCPs are becoming more common in the media, there has been a rapid increase in the volume of PCPs being sold, and the plans have been sold by firms whose main specialism is not financial services and who may therefore lack financial know-how. (Although much of the media coverage of PPI has centred on mis-selling by banks, firms such as retailers, catalogue shopping companies and motor dealerships were all very much involved in PPI mis-selling).

Graham Hill, board member and car finance expert at the National Association of Commercial Finance Brokers, said that “the car finance industry could be shaken to its roots” over this issue. Mr Hill added:

“While the PCP in itself can be an appropriate solution for many car owners, as it reduces the monthly payments quite significantly, the issue lies with the way these products have been sold.

“Were people made aware of the increased interest rate charges on PCPs relative to hire purchase agreements?

“A significant number of consumers and business owners could be in for a sizeable cash windfall from the cars, motorcycles and vans they have purchased.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Major global cyberattack – a wake-up call for firms?

The recent cyberattack resulted in considerable problems in the National Health Service, but its effects were felt much more widely than that. The WannaCry virus affected organisations of all types and sizes across 150 countries, and led to the Financial Conduct Authority (FCA) issuing guidance to authorised firms.

The FCA’s statement reads simply:

“The National Cyber Security Centre has issued guidance on the recent ransomware attack. Our advice to firms is to review this and take appropriate action. If your firm has been subject to an attack please visit Action Fraud, or contact them on 0300 123 2040 and let your regulator(s) know through your usual route.”

The National Cyber Security Centre guidance, to which the FCA statement contains a hyperlink contains the following advice:

• All users of Microsoft Windows should update to the latest version, to ensure their systems are protected by the latest security patches
• Users should make sure that their anti-virus protection is up-to-date, and should run a scan to ensure their systems are currently free from malware
• Users should back up important files and store these separately from their computer

Any firm that has fallen victim to a ransomware attack should immediately disconnect their computer from the network, and turn off the Wi-Fi. They should then safely format or replace their disk drives; install and update the operating system and all other software; and install, update, and run antivirus software.

The NCSC also advises anyone who has been affected not to pay the ransom demand that appears on their screen.

The FCA says that firms:

• Need to have a ‘security culture’ – everyone from the board to senior management to supervisors and ordinary employees must take the issue of cyber security seriously
• Must identify what their key assets are, and how they might protect these
• Must train staff to recognise suspicious activity, such as phishing emails
• Should carry out security screening of staff with access to important data
• Need to have adequate detection capabilities, so that they know straight away if they have been attacked
• Must have effective recovery and response procedures in the form of a detailed business continuity plan, which explains what they will do in the event of a security breach to ensure business operations can continue
• Need to test their data security measures on a regular basis

Research by financial software provider Intelliflo shows that 44% of financial advisers have experienced of cyberattacks, although two thirds of these attacks affected their personal life rather than their business activities. The research also reveals that 82% of clients would stop doing business with their adviser if they became aware that the firm had been hacked.

Nick Eatock, executive chairman of Intelliflo, said:

“The findings are a shocking testament to how common cyberattacks have become and highlights how crucial it is that advisers ensure they are using software for clients that is designed to protect data from malicious attack.

“When you take into consideration that, under the general data protection regulation, all firms will have to report breaches that are likely to result in a risk to the rights and freedoms of individuals within 72 hours, breaches will become publicly available.

“In some cases, you will be required to inform the individuals who have been affected by the breach.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Advisory firms warned about using risk profiling tools

Rory Percival, a former technical specialist at the Financial Conduct Authority (FCA), has warned advisory firms of the dangers of relying on risk profiling tools when assessing clients’ attitudes to risk.

Back in 2010, the Financial Services Authority audited the 11 principal providers of risk profiling tools, and found that nine of these firms had products that were ‘not fit for purpose’. Mr Percival acknowledged that improvements had been made since then, but still added a note of caution, by saying:
“None of [the risk profiling tools] are perfect or are guaranteed to provide you with the right answer to a client’s risk profile in every scenario.
“They generally involve a [suggested] asset allocation for [a chosen] level of risk – and my main concern is how they vary from one provider to the next.”
Backing up his comments about how asset allocation can vary between providers of risk profiling tools, he said that he had recently conducted his own research into six of the main providers. He found that a client with a cautious (low) attitude to risk could be recommended to invest anything between 35% and 65% of their portfolio in equities, depending on which provider’s tool was used.
Mr Percival said regarding this:
“That’s quite a big difference and it concerns me – so you need to look at that aspect.”
Mr Percival added that, due to the way that Part II of the European Union’s Markets in Financial Instruments Directive (MiFID II) was worded, it was more important than ever that firms ensure that they have robust systems in place for assessing client risk profiles. MiFID II comes into force in the UK in January 2018, and the UK will still be a member of the Union at this time, so the nation’s advisory firms need to ensure they are ready for the implementation of this Directive.

Mr Percival added:

“Sometime between now and January [advisers] are going to need to assess [whether] the risk profiling tool is fit for purpose.”

Neither Mr Percival nor the FCA is saying that advisory firms cannot make use of risk profiling tools when assessing clients’ attitude to risk. However, firms must conduct their own due diligence to identify which are the best tools to use, and in any case, must not slavishly follow the results obtained from these tools when making their recommendation. Advisers need to ‘know their client’, and need to be confident that the recommended asset allocation is appropriate for each individual.

Recommending higher risk investments to clients who are not willing to accept much risk to their capital does of course put firms at risk of having complaints against them upheld. If the Financial Ombudsman Service feels that the recommended asset allocation was unsuitable for a client, then it will not hesitate to order the firm to compensate the client for any losses suffered.

Mr Percival worked at the FCA for 10 years before leaving to start his own business. He remains a respected name in the compliance arena and is still much in demand as a guest speaker at financial services conferences and events.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Advisory firm loses out at FOS over mortgage PPI complaint

Lighthouse Advisory Services Limited has been ordered to pay compensation to a couple, after the Financial Ombudsman Service (FOS) ruled that the single premium mortgage payment protection insurance (PPI) plan they were recommended to take out back in 2007 was unsuitable.

Lighthouse appealed to an ombudsman at the FOS after disagreeing with the adjudicator’s original verdict, but has now exhausted all its avenues for appeal.

The reasons why the FOS found in favour of the clients include:

• The PPI policy did not cover the full term of the mortgage – the term of the insurance was only four years when the mortgage had been effected over a 21-year term
• The adviser did not explain clearly the total cost of the PPI, which was substantial given that the £2,574 single premium was added to the loan, with interest payable on this premium over the full 21-year term
• The lack of a pro-rata refund were the couple to have cancelled their PPI early
In her final decision, ombudsman Nimisha Radia said:
“The policy didn’t offer them the flexibility I think they may have needed.
“Had Lighthouse made the terms clear, I don’t think Mr and Mrs K would’ve bought the policy because I think that it’s more likely than not they would’ve wanted a flexible arrangement.
“I think if they’d understood that they were paying for the policy over 21 years and were only getting cover for four years, they wouldn’t have thought that was good value for money.
“So, overall I don’t think Mr and Mrs K were given the right advice and information at the time of sale. And I don’t think that the policy was suitable for them.”
Lighthouse will now need to refund the full cost of the PPI, with an allowance for interest at 8%.

The firm had attempted to argue that, as it was neither the lender nor the insurer, it had no control over the format and quality of the cost information disclosed to the clients, and added that it believed it had no obligation to draw the clients’ attention to the amount of interest payable.

However, financial advisory firms do of course have a duty to make sure that all recommendations are suitable for clients’ needs and financial circumstances; and have an additional responsibility to clearly explain the key features of each product.

Clients with single premium PPI plans are likely to have a strong case for arguing that they were mis-sold, as the insurance term did not usually match the term of the mortgage, interest was payable on the premium throughout the mortgage term and the refund terms were generally unfavourable.

In January 2009, the Competition Commission (CC) recommended that lenders should no longer be able to sell PPI at the same time as the loan. This effectively killed off single premium plans. The CC said that very few customers were shopping around for their PPI, and that this was leading to expensive, poorly designed policies being sold.

As with all PPI, consumers who were sold mortgage PPI and/or single premium PPI have until August 29 2019 to make a mis-selling complaint, ahead of a claims deadline to be introduced by the regulator, the Financial Conduct Authority.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


ICO imposes record fine on claims call firm for nuisance calls

The Information Commissioner’s Office (ICO) has imposed its largest fine to date for nuisance calls. Keurboom Communications Ltd, based in Dunstable, Bedfordshire, was fined £400,000 by the data protection regulator for making almost 100 million unsolicited automated calls regarding payment protection insurance (PPI) and road traffic accident claims.

Keurboom’s 99,535,654 calls were made over an 18-month period, and prompted 1,036 complaints. Many consumers complained about being called more than once on the same day, and about calls made at unsocial times of the day.

The calls included an option for recipients to opt out of future calls by pressing ‘9’. However, firstly this often did not work, and secondly, even if it had worked, it would not have been sufficient to demonstrate compliance with the law. The Privacy and Electronic Communications Regulations say that companies can only make automated marketing calls to people who have given explicit prior consent to receiving this type of communication.

The ICO adds that many of the calls were misleading, in that they implied that the matter was urgent, or falsely claimed that the call related to a recent traffic accident the recipient had supposedly been involved in, or to an ongoing PPI claim that the recipient had already tabled.

The regulator also says that Keurboom did not co-operate with its investigation.

It is however unclear whether the ICO will be able to recover the fine. Like so many companies who have received ICO fines, Keurboom has gone into voluntary liquidation. The press release says that the ICO “is committed to recovering the fine by working with the liquidator and insolvency practitioners.” Government proposals that would have allowed the ICO to fine the company’s senior managers up to £500,000, and would therefore have prevented the management from avoiding the fine by using this loophole, have yet to become law.

Keurboom has also been prosecuted in the courts for non-compliance with the ICO’s requirements. It has at various times failed to comply with seven information notices requiring it to provide information to the ICO. Keurboom’s director, Gregory Rudd, pleaded guilty at Luton Magistrates Court in April 2016 to the charge of failing to comply with an information notice. Keurboom was fined £1,500, and was also ordered by the court to pay £435.95 costs and a victim surcharge of £120. Mr Rudd was fined £1,000, in addition to costs of £435.95 and a victim surcharge of £100. The episode has of course landed Mr Rudd with a criminal record.

Steve Eckersley, Head of Enforcement at the ICO said:

“Keurboom showed scant regard for the rules, causing upset and distress to people unfortunate enough to be on the receiving end of one its 100 million calls.

“The unprecedented scale of its campaign and Keurboom’s failure to co-operate with our investigation has resulted in the largest fine issued by the Information Commissioner for nuisance calls.

“These calls have now stopped – as has Keurboom – but our work has not. We’ll continue to track down companies that blight people’s lives with nuisance calls, texts and emails.”

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.


Debt manager has authorisation application refused over advice standards and record keeping

Consumer credit and debt management firms should be in no doubt that the Financial Conduct Authority (FCA) operates a considerably stricter regulatory regime than was the case under the Office of Fair Trading (OFT). A number of firms who had operated for many years under the auspices of the OFT have been unsuccessful when applying for authorisation from their new regulator.

The FCA has now refused an application from East London-based Nationwide Debt Consultants Limited (NDC), even though the firm had been offering debt counselling and debt adjusting services since 2008. The firm was granted interim permission when the FCA took over as consumer credit regulator in 2014, but on January 24 2017, the FCA served the firm with notice that it had refused its application for full authorisation. This was largely due to concerns over NDC’s advice standards and record keeping. The firm’s interim permission was cancelled with effect from this date, and it is no longer licensed to carry out debt management activities.

The FCA did not publicise details of its refusal of the application until May 2017.

When first assessing the firm’s application, the FCA identified five main areas of concern:

• NDC did not keep records that were sufficiently comprehensive to allow the FCA to assess whether the firm was giving suitable debt advice
• The firm was not providing information to customers such as details of the actual or potential advantages, disadvantages, costs and risks of each available debt solution; and was not providing annual statements to the standard required by FCA rules
• The firm’s communications regarding the level of fees customers needed to pay to NDC were misleading
• The level of fees being charged meant that many customers were paying more than 50% of their disposable income in fees, which is a breach of the FCA’s rules.
• NDC’s compliance monitoring of advice given was inadequate, and the firm was unable to confirm to the FCA which files had been selected for review

The FCA acknowledges that NDC took action to address some of these issues, but was still not satisfied, believing that “the firm has not been able to demonstrate to the Authority’s satisfaction that it has both fully understood the extent of the remaining deficiencies identified by the Authority and effectively implemented the necessary changes to rectify those deficiencies going forward.”

The FCA’s Decision Notice adds:

“The Authority considers that the firm’s failure to recognise the deficiencies identified by the Authority, and to remedy adequately some of those deficiencies, reflects on the adequacy and competence of the firm’s human resources, including at a senior management level, and on the adequacy of its systems and controls.”

The FCA reviewed some recent sales made by NDC, and says that in many of these cases, customers with low levels of disposable income were required to pay a high proportion of that disposable income in fees, and were recommended debt management plans with long durations that may not have been suitable for their circumstances.

In summary, the FCA says it could not be satisfied that NDC could meet three of its Threshold Conditions: 2C (Effective supervision), 2D (Appropriate resources) and 2E (Suitability).

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.

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