18May

The Financial Conduct Authority (FCA) has refused an application to carry out debt management activities from Manchester-based Nasser Yusuf, who intended to trade as Advance Money Management.

The two main reasons that the regulator refused the application were that Mr Yusuf failed to disclose details of his disciplinary history, and that he failed to show the necessary competence required to become a regulated person. He was intending to operate as a sole trader.

Applicants for consumer credit authorisation need to answer the following question on their application form:

“Has the Applicant ever been: criticised, censured, investigated, disciplined, suspended, expelled, fined, or been subject to any other disciplinary intervention action by any financial services regulator or government body in the UK or overseas?”

Mr Yusuf answered ‘No’ to this question even though he:

• Was warned by the former consumer credit regulator, the Office of Fair Trading (OFT), in June 2007 for failing to inform them of a change of address
• Was warned by the OFT in April 2008 over non-compliant advertising material
• Continued to trade after March 22 2008 when his Consumer Credit Licence lapsed. He applied unsuccessfully for a new licence in June 2008
• Failed to refund brokerage fees to certain customers, even though he had been warned about this issue by the Financial Ombudsman Service and Trading Standards
• Did not deal with complaints in a timely manner in the past

Given this past history, it is unlikely that the FCA would have approved his application in any case had it been disclosed. However, the FCA regard any failure to disclose relevant information on an authorisation application as a very serious matter.

Regarding his competence, the FCA said that Mr Yusuf failed to provide satisfactory answers to the following questions:

• What a statute barred debt is
• The circumstances in which a Debt Relief Order would be revoked
• What the difference is between a Trust Deed and a Protected Trust Deed
• How a Debt Relief Order might affect a customer’s credit rating
• What a Debt Arrangement Scheme is

His Facebook page also contained a statement to the effect that he could freeze interest on customer’s debts. To state or imply this is a breach of the FCA’s rules. The statement has since been removed.

Mr Yusuf also failed to demonstrate that he had opened a client bank account (for the purposes of holding client money) and failed to provide a copy of the promotional material he intended to use on his website.

In summary, the FCA said it could not be satisfied that Mr Yusuf could satisfy as many as three of the 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.