Payday lenders not meeting new rules regarding comparison websites

Consumer financial website Moneysavingexpert.com has highlighted a number of payday lenders who were not complying with new rules introduced in May 2017 by the competition watchdog, the Competition and Markets Authority (CMA).

In a drive to improve competition across the payday sector, all lenders must now list on at least one price comparison website, and this website must be one that is regulated by the Financial Conduct Authority (FCA). Their websites must also contain a prominent link to the chosen comparison site, however Moneysavingexpert looked at 50 lenders’ sites in June of this year, and could not find any such link on ten of the sites, while on another ten sites, the link was not judged to be ‘prominent’ enough.

Some lenders have however now remedied this after being ‘named and shamed’ by Moneysavingexpert.

Wonga, the best-known name in the marketplace, has chosen a site called Choose Wisely to list its offering. It appears to be meeting the requirements – there is a prominent link to this site in the top right of its homepage.

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

In response to the findings of Moneysavingexpert, a spokesperson for the CMA commented:

“We can take further enforcement action which in the past has included issuing detailed directions to companies and ultimately we can go to court – albeit as a last resort given the time and expense involved when obtaining compliance by other methods is quicker.”

This illustrates that payday lenders are becoming subject to new requirements all the time, and that it is not just the FCA regulations that firms need to comply with.

Complaints about payday lenders are increasing rapidly, so firms that fail to treat their customers fairly could find themselves being forced to pay large sums in compensation. Payday loan complaints to the Financial Ombudsman Service rose by 227% from 3,216 in 2015/16 to 10,529 in 2016/17. In 2014/15, there were only 1,157 complaints made to the FOS about these loans, so complaint numbers have risen by a factor of nine in just two years.

Lenders should also keep a close eye on any announcements from the FCA in the coming weeks. It is well known that the regulator is reviewing the price cap, which limits the amounts lenders can charge in fees and interest, and limits the number of times a loan can be rolled over to two.

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.


MOJ issues report on second quarter enforcement action against CMCs, and looks back on ten years of regulation

The Claims Management Regulator at the Ministry of Justice (MoJ) has published details of its enforcement activities during the second quarter of 2017. Although only two claims management companies (CMCs) had their licences cancelled between April and June, and only one more company received a fine, a further 77 companies were warned about their business practices. 15 new formal investigations were opened – 11 concerning CMCs that are authorised by the MoJ and four concerning companies suspected of operating in the claims sector without authorisation.

The two companies to lose their permissions were Your Money Rights Limited and Barrington Claims Limited.

Some of the reasons why Your Money Rights was stripped of its authorisation are similar to the reasons the MoJ has taken action against other CMCs, however in this case the company also failed to co-operate with the regulator’s efforts to supervise the company. Your Money Rights breached General Rule 11 of the Conduct of Authorised Persons Rules 2014, which stipulates that companies must comply with the MoJ’s monitoring and enforcement arrangements. It also failed to observe General Rule 16, which requires CMCs to notify the MoJ within 20 working days if any of the information they provided in their authorisation application subsequently changes. Rule 16 also asks that any additional information which the Regulator requests from a company is also supplied within 20 working days. The Rule adds that the information provided ‘must not be false or misleading’.

The company was also said to have made misleading sales calls, to have engaged in high pressure selling and to have not given customers sufficient time to consider contracts before being asked to enter into them.

Barrington Claims Limited breached 12 separate areas of the Conduct of Authorised Persons Rules. These included Client Specific Rule 12, which forbids a claims company from stating or implying that their clients have a greater chance of success by pursuing a claim with them, compared to their chance of success were they to pursue a DIY claim.
Like Your Money Rights, Barrington Claims also made misleading sales calls, and did not give customers sufficient time to consider contracts.

The company fined during the three-month period covered by the bulletin was TDP Direct Marketing Limited. A fine of £6,600 was imposed for breaches of the rules relating to record keeping and obtaining leads.

The bulletin also highlights that it is now ten years since the MoJ started regulating CMCs. The bulletin contains a link to a special report that summarises the many changes that have occurred in claims regulation over that time., which include:

• 2008 – a requirement for CMCs to hold professional indemnity insurance came into force
• 2009 – the introduction of the Anonymous Reporting Hotline, where consumers can confidentially report concerns about CMCs
• 2013 – the introduction of the personal injury referral fee ban, and a new rule requiring companies to draw up formal written contracts with their customers
• 2014 – new requirements covering how companies can obtain leads, and on how CMCs must check claims have a reasonable chance of success before being submitted
• 2015 – customers with complaints about CMCs were able to refer these to the Legal Ombudsman for the first time

During the last 10 years, the MoJ has cancelled the licences of 1,387 CMCs and imposed fines totalling £2.8 million.

In the special report, head of claims regulation Kevin Rousell comments:

“With a decade of hard work behind us, a new and perhaps even more challenging period lies ahead. The planned move of regulation to the Financial Conduct Authority (FCA) will bring about an even stricter regime.”

Finally, the bulletin makes reference to the action taken by the Insolvency Service against Dean Anthony Spencer. Mr Spencer was disqualified from serving as a director of any company for ten years after his CMC, Claim & Gain Limited, misled its customers in a number of ways regarding the fees to be charged and the services to be provided in return.
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 fines loan provider

The Information Commissioner’s Office (ICO) has imposed an £80,000 fine on Provident Personal Credit Ltd (PPC) for sending large numbers of nuisance marketing texts. The data protection watchdog reports that the Bradford-based firm was responsible for 999,057 unsolicited text messages between April and October 2015 to promote personal loans offered under the Satsuma Loans brand name. 868,393 were sent by affiliate firm Money Gap Group Ltd, which trades as CashLady, and another 130,664 by another affiliate, Sandhurst Associates Ltd. Provident entered into a contract with these firms to send the texts on its behalf.

However, the press release suggests that the actual number of texts “was significantly higher” as it is likely that other affiliates of Provident sent further marketing texts.

As with so many recent enforcement cases, Provident was in breach of section 22 of the Privacy and Electronic Communications Regulations, which forbids firms from sending marketing texts to anyone who has not given explicit consent in advance to receiving them. In this case, the texts invited people to opt out of future messages, by texting ‘stop’ or ‘QUIT’ or similar, but giving this option to recipients has never been sufficient to comply with the Regulations.

The ICO does acknowledge that in this case, the recipients had received ‘privacy notices’ from the affiliate firms, which stated that they may receive information about “goods and services that may be of interest”, and products and services available from “selected partners”. However, no mention was made of Provident or any of its trading names, and no mention was made either of the fact that the “information” would be sent in the form of direct marketing text messages.

The fine will be reduced to £64,000 if Provident does not exercise its right of appeal, and if it also makes full payment by August 10.

ICO Head of Enforcement Steve Eckersley said:

“The law is clear. You can’t send marketing texts to people who have not signed up to receive them.

“Being bombarded with texts you didn’t ask for and don’t want is an intrusion into people’s privacy, an irritation and, in the worst cases can be upsetting.

”Companies have no excuse whatsoever for sending nuisance texts, whether they do it themselves or employ someone else to do it for them.”

In a statement responding to the fine, Provident said:

“Although the ICO found that the contravention was not deliberate, PPC takes this contravention extremely seriously. It has reviewed its marketing processes and put in place procedures designed to prevent such conduct happening again.”

According to the recently published ICO annual report, the data protection watchdog imposed 23 fines, totalling £1.9 million, for similar offences during the 12 months to March 31 2017. The maximum fine that can be imposed on any firm for breaches of this nature is £500,000.

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 fines compliance oversight officer for pension transfer failings

Officially, the Senior Managers & Certification Regime will not apply to financial advisory firms, consumer credit firms and other institutions until early next year, and the Regime is only formally in force in the banking sector at present.

However, firms should be in no doubt that, ahead of the implementation of the Regime, it is already possible for senior managers to be held accountable when things go wrong at their firms. One senior manager who now knows this all too well is David Samuel Watters, who until 2011 was compliance oversight officer at FGS McClure Watters (FGS) and then at its successor firm Lanyon Astor Buller Ltd (LAB). The Financial Conduct Authority (FCA) has ordered Mr Watters to pay a fine of £75,000 from his own personal funds after serious issues were identified with the pension transfer advice process at the firms.

Mr Watters’ failings included:

• Not understanding his obligations as a compliance oversight officer (the CF10 controlled function)
• Allowing the pension advisers to design the advice process, without ensuring that this complied with regulatory requirements
• Not identifying ways in which the advice process breached the FCA’s Conduct of Business Reviews, even though he carried out file reviews himself from time to time
• Engaging an external compliance consultant who lacked the experience to provide effective advice on a complex area such as pension transfers, and in any case Mr Watters failed to act on the consultant’s recommendations
• Failing to disclose to clients a conflict of interest that existed with the advice process, and failing to put in place measures to manage the risks associated with this conflict. FGS and LAB were paid commission by the pension provider to whom customers transferred, and so benefitted financially from customers choosing to transfer. Additionally, one of the firm’s advisers received a proportion of the proceeds from the pension transfer advice business
• Not considering the changes that might be required to the advice process as a result of the Markets in Financial Instruments Directive II (MiFID II)

In every one of 17 files reviewed by the FCA, the firm failed to meet the disclosure rules, and in many of these cases there were also issues over the suitability of advice.

Pension transfers will always be classed as a high-risk area by the FCA. Approximately 500 clients of FGS/LAB, with combined pension funds worth some £12.7 million, transferred from a defined benefit (final salary) scheme to a defined contribution (money purchase) scheme. The FCA comments that “in many cases, it may have been unnecessary for customers to leave their DB schemes, thereby losing their guaranteed benefits.”

LAB will now contact the affected customers, and pay redress to them where appropriate.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:

“It was Mr Watters’ responsibility to take reasonable steps to put in place a compliant advice process.  His failure to do this placed customers at risk of needlessly losing valuable benefits for their retirement.”

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 publishes annual report

The data protection regulator, the Information Commissioner’s Office (ICO), has published its annual report for 2016/17.

Information Commissioner Elizabeth Denham commented:

“My office is preparing for the future in data protection with new processes, a comprehensive change programme and an education and guidance programme for stakeholders and the public.

“As the laws we regulate change, there is an opportunity for us to improve the trust that the public feel in those who process their personal data or who make information available to the public. We have launched our new Information Rights Strategic Plan that places this trust at the heart of what the Information Commissioner’s Office will do in the next four years.”

In her foreword to the report, Ms Denham also spoke of how the ICO “continued to take action against nuisance calls and the misuse of personal data, bringing civil and criminal prosecutions against a number of individuals whose practices contravened individual privacy rights.” A number of fines, some for six-figure sums, were handed down to firms making nuisance calls and sending spam marketing texts, across a variety of business sectors, during the course of the year. In all, the ICO fined 23 firms a total of £1,923,000 for breaches of the Privacy and Electronic Communications Regulations.

The regulator also secured 21 criminal convictions against firms and individuals who breached data protection laws.

A key part of the ICO’s work during the year was preparing for the introduction of the European Union’s General Data Protection Regulation (GDPR) in May 2018. The ICO has published a guide detailing steps firms should be taking to prepare for its implementation, and no firm in any business sector can afford to ignore their GDPR obligations.

Ahead of the introduction of the GDPR, the report also highlights that the ICO issued guidance to firms on its expectations under existing UK law regarding privacy notices. A privacy notice is a document in which a firm explains why it needs to collect personal data, and what it intends to do with the data once obtained.

Cybersecurity has been something of a hot topic during the last 12 months, and firms of all sizes and types need to ensure they have rigorous security measures in place to reduce the risk of them falling victim to a cyberattack. The report says that the ICO has “worked with Government on its cyber security regulation and incentives review, providing evidence to Parliament during its scrutiny of the issue.” It adds that “the review makes a number of recommendations and we are working with the National Cyber Security Centre and Government to play our part in fulfilling these.”

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.


Government proposes clampdown on fake sickness claims

The Government has proposed new measures in response to the increase in the number of people making claims regarding holiday sickness.

According to some in the travel industry, the number of claims of this type has risen by 500% since 2013. The Government notes that a similar rise in claims has not been seen in other countries, and comments that the issue “is damaging Britain’s reputation overseas” and that it “could drive up holiday costs” for all consumers.

The Government is now proposing to limit the cash incentives for making a claim. Tour operators would also pay a prescribed sum, depending on the value of the claim, so that they could know in advance what the costs of defending a claim would be.

Holiday sickness claims have often been very hard for tour operators to defend, especially on ‘all inclusive’ holidays, where it would be expected that holidaymakers would eat all of their meals at the resort.

Justice Secretary David Lidington MP said:

“Our message to those who make false holiday sickness claims is clear – your actions are damaging and will not be tolerated.

“We are addressing this issue, and will continue to explore further steps we can take. This government is absolutely determined to tackle the compensation culture which has penalised the honest majority for too long.”

Foreign Secretary Boris Johnson MP had previously said that “British digestive systems have become the most delicate in the world”.

Mark Tanzer, chief executive of the Association of British Travel Agents, said:

“These claims are tarnishing British holidaymakers’ reputation abroad, particularly in Spain where they are costing hoteliers millions of pounds.”

Thomas Cook UK’s managing director Chris Mottershead warned of the possible consequences of the rise in sickness claims by commenting:

“It has the potential of putting hoteliers out of business. They will stop British customers coming into their hotels.”

The Government press release highlights that anyone found guilty of making a fraudulent claim could receive a prison sentence of up to three years.

The Claims Management Regulator at the Ministry of Justice first highlighted the issue of holiday sickness claims in its November 2016 bulletin to claims management companies (CMCs). On that occasion, it highlighted that assisting with claims from people who have become ill whilst on holiday is an activity that requires authorisation. Once authorised, companies conducting this type of claims activity are subject to the same rules as all other CMCs. The regulator is particularly concerned that holiday sickness claims companies are approaching potential clients in person, or are failing to obtain consent before targeting individuals with direct marketing material. These practices constitute a breach of the MoJ’s rules. According to the bulletin, some companies are simply randomly contacting people who have recently been on holiday.

In July 2017, Thomas Cook successfully defended a £10,000 holiday sickness claim brought by Julie Lavelle and Michael McIntyre, who waited until almost three years after a holiday in Gran Canaria to make their claim. It was remarked on in court that the couple did not mention their alleged condition to hotel staff or to tour representatives at the resort at the time, that Mr McIntyre did not mention any illness on a holiday feedback questionnaire he completed on the flight home, and that Ms Lavelle did not bring up her illness during a GP visit a few days after returning. The judge described the claim that the entire family had suffered from gastroenteris throughout the trip as “wholly implausible”.

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 publishes review of firms’ handling of PBA complaints

The Financial Conduct Authority (FCA) has published details of how firms have responded to the findings of its thematic review into packaged bank account (PBA) complaint handling.

In October 2016, the FCA published the results of a thematic review into PBAs. This review found that for complaints which alleged that a PBA had been mis-sold, firms only achieved fair outcomes in 44% of cases.

The FCA’s major concerns included:

  • Weaknesses with how firms recorded the investigation
  • Failing to gather all of the required information to investigate the complaint
  • Not giving the benefit of the doubt to the customer where the two sides disputed what actually happened during the sale
  • Staff failing to follow firms’ complaint handling procedures

Now, in July 2017, the FCA has reported on the progress made by firms in improving standards since the thematic review. The regulator says that it “recognised that firms had been committed to making improvements”, and adds:

“Our follow up review indicates firms have made progress in how they investigate complaints. For example, we found firms had improved their approaches to gathering customers’ testimony.”

However, the FCA has identified two key areas in which firms can still make improvements to their PBA complaint handling practices. It suggests that many firms could still make improvements to the audit trail in their complaint files, and adds that the quality of final response letters could be improved.

The final response letter is the document in which the firm explains to the customer whether it is upholding or rejecting the complaint, and its reasons for doing so. The FCA recommends that final response letters should:

  • Explain what the firm understands the customer’s reasons for making the complaint were
  • Explain the investigation process the firm followed in a series of logical steps
  • Fully address every separate point the customer made in their original complaint
  • Make use of sub-headings or sign-posting where appropriate
  • Be tailored to the specific circumstances of the customer’s complaint, rather than containing lots of standard, generic text

Many claims management companies (CMCs) have been active in the area of PBA mis-selling claims in recent years, however the Financial Ombudsman Service reported that the overall number of PBA complaints fell by 54% in 2016/17 when compared to 2015/16, from 44,244 to 20,284. Only 37.5% of the 2016/17 PBA complaints were made via a CMC, down from 62% in the previous year. The FOS upheld 19% of the PBA complaints it closed in 2016/17, compared to 14% in 2015/16.

PBAs are bank accounts where the customer pays a monthly fee in exchange for receiving a number of benefits, such as travel insurance, breakdown insurance or insurance for electronic gadgets. However, there have been a number of cases of customers being sold PBAs where they cannot claim on the associated insurances, or where they were either told by the firm that there was no alternative to a PBA, or were ‘upgraded’ to a PBA without their knowledge or consent.

In response to some of these concerns, since 2013 firms selling PBAs have been subject to new rules. They must now establish whether applicants would be eligible for each of the individual insurances offered under an account before selling it. Firms must also issue annual eligibility statements to account holders confirming whether these customers remain eligible to claim on the various insurances.

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 publishes interim findings of study into retirement income market

The Financial Conduct Authority (FCA) has published interim findings of its Retirement Outcomes Review, which looks at how the introduction of the pension freedoms in 2015 has affected the way in which people access their retirement savings.

The pension freedoms allowed savers to access as much or as little of their pension fund as they wished, once they had reached the age of 55. The FCA says that, two years on, “accessing pension pots early has become the new norm”, highlighting that in 72% of cases where a pension pot has been accessed, the person making the withdrawal was below the traditional retirement age of 65.

In 53% of cases where a pension pot is accessed, the saver withdraws all of their funds. However, 90% of the fully withdrawn pots are worth £30,000 or less. In addition, 94% of those making full withdrawals claimed to have additional sources of retirement income, other than the state pension.

The finding that appears to be of greatest concern to the FCA is that in the majority of cases (52%), the funds from fully withdrawn pots were not spent but were instead transferred into other savings or investment vehicles. There may therefore be little evidence that pensioners are blowing their retirement savings on a Lamborghini, to paraphrase former pensions minister Steve Webb. However, this does mean that consumers could be missing out on tax benefits, or on higher potential growth, by moving the funds out of the pension environment. The regulator suggests that people may be doing this “due to a lack of public trust in pensions.” Lee Hollingworth, head of defined benefit consulting at actuaries Hymans Robertson described withdrawing funds from a pension only to invest them elsewhere as “totally irrational.”

Twice as many people now take out a formal drawdown policy as take out a traditional annuity. This is a major change from the situation prior to 2015, when more than 90% of people accessed their pension pot via an annuity.

Drawdown allows savers to access income and lump sums from their pension fund, while the remaining amount remains invested.

Another significant change here is that, prior to 2015, as many as 95% of those entering drawdown sought financial advice before doing so. Since the introduction of the pension freedoms, this has fallen to 70%.

The FCA comments on a number of ways in which these trends could be detrimental to consumers, including:

  • Consumers who don’t take financial advice typically accept their pension provider’s drawdown offer, without shopping around for a better deal
  • Drawdown is a complex area and the regulator is concerned about whether everyone choosing this option really understands what it involves
  • Annuity providers continue to withdraw from the market, resulting in reduced competition

Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:

“Since the introduction of the pension freedoms, the retirement income market has changed substantially. This study looks at what has happened during this time, and gives us an early view of areas to keep a close eye on.

“We have identified areas where early intervention may be needed either now or further down the track to put the market on the best footing for the future. Ensuring this market works well will require cooperation across Government, regulators, the industry and consumer bodies.

“We will work closely with stakeholders to make sure we are clear on the actions we are best placed to lead.”

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 publishes proposals on staff incentives and performance management in consumer credit firms

The way staff in financial services firms are paid can most certainly affect their behaviour, and consequently then have an impact on the way customers are treated. For example, if staff are heavily incentivised via bonuses, commission or other perks, they can end up putting pressure on customers to purchase products that are not in their best interests.

The Financial Conduct Authority (FCA) has proposed a series of new rules regarding remuneration for the consumer credit sector, after finding in a thematic review that “some firms have inadequate systems and controls to manage the risks of staff incentives.”

The report says that many of the firms involved in the review had remuneration systems that exhibited some or all of the following risk factors:

• Commission making up the majority (or all) of the remuneration for certain staff members
• Different rates of commission being paid for selling different products
• Payment of commission, or the rate at which commission is paid, being dependent on reaching certain sales targets

The FCA adds that some of the firms also had inadequate systems for managing these high-risk remuneration systems. Six firms did not have any arrangements in place for monitoring their sales or collections activities, and in another eight firms the monitoring was carried out by line managers, whose own pay was dependent on the sales performance of the staff they were monitoring.

The FCA paper summarises the main risks that could arise from having a high-risk remuneration system, and from not managing this effectively, as:

• Customers receiving inaccurate or misleading information on the costs, benefits, risks, disadvantages and other features of credit products
• Customers being put under pressured to take out inappropriate or unaffordable products
• Customers in default or in arrears not being treated considerately

As a result of the concerns identified during the review, the FCA is proposing new high-level rules, under which firms would be obliged to have “adequate arrangements to detect and manage any risk of non-compliance with their regulatory obligations arising from their remuneration or performance management practices.”

The FCA’s review encompassed some 98 firms from different areas of the credit sector.

The FCA’s consultation ends on October 4, until which time firms and consumer groups are invited to have their say on the proposed new rules.

Jonathan Davidson, Executive Director of Supervision – Retail and Authorisations at the FCA, said:

“The way firms pay and manage the performance of their staff is a key driver of culture and customer outcomes, and a continuing priority for the FCA. We expect firms to understand the effects their staff incentives might be having.”

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 publishes annual report

The Financial Conduct Authority (FCA) has published its annual report for the 12 months to March 31 2017. It says it believes its key achievements during that period include:

  • Further development of the FCA’s ‘Mission’ – this is the framework for the strategic decisions the FCA makes
  • Issuing new rules ahead of the implementation of the Markets and Financial Instruments Directive Part II (MiFID II)
  • Continuing to carry out enforcement activity to protect consumers and preserve market integrity
  • Continuing to promote competition in key sectors of the industry
  • Setting a deadline for payment protection insurance claims
  • Completing the roll out of the Senior Managers and Certification Regime in the banking and insurance sectors
  • Publishing the Financial Advice Market Review
  • Helping consumers who find themselves in persistent debt due to mortgage payment shortfalls, high-cost credit products and payment arrears for unsecured lending
  • Setting a cap on pension exit charges

In his introduction to the report, FCA chairman John Griffith-Jones commented that some risks remained ever-present, saying:

Among [these risks] are overindebtedness, the ability to exploit more vulnerable consumers, the pace of technological change and its threats as well as its undoubted benefits, a lack of competition in certain sectors and meeting our long-term savings and pensions needs.”

In his statement in the report, chief executive Andrew Bailey writes of his organisation’s “focus on vulnerable consumers [that] can be seen in many areas of our work”. He adds that:

“In November 2016, we launched our review of high-cost credit, which includes overdrafts, rent-to-own, guarantor loans, catalogue credit and log book loans. This follows on from the introduction of the cap on payday loans in 2015.”

The report says that the FCA’s priorities for the year were:

  • Pensions
  • Financial crime and anti-money laundering
  • Wholesale financial markets
  • Advice
  • Innovation and technology
  • Firms’ culture and governance
  • Treatment of existing customers

Some of the ways the FCA claims to have achieved its three operational objectives during the year are also cited in the report:

  • Securing protection for consumers – forcing insurers to tell customers at renewal stage what last year’s premium was, and introducing a requirement to encourage their customers to shop around; reviewing the high-cost credit price cap; reviewing how firms are treating customers in arrears; capping pension exit charges and ensuring firms pay compensation to customers where they have suffered detriment
  • Protecting and enhancing the integrity of the UK financial system – continuing to carry out thematic work, reviewing data in firms’ regulatory returns and carrying out other regulatory assessments; as well as assisting firms in making the transition to MiFID II
  • Promoting competition for consumers – proposing a package of measures to improve competition in the asset management market, and also in the credit card market

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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