The Financial Conduct Authority (FCA) publishes warnings on its website almost daily about firms suspected of carrying out financial services activities without its authorisation. The first such warning about a consumer credit firm was posted on April 4 2014, only days after the FCA took over as consumer credit regulator, and a number of other warnings have been posted since.
However, on July 3 2014 a more serious warning was posted about an authorised credit firm who may be using the identity of a bona fide FCA-authorised firm. The warning concerns a firm calling itself UK Fast Loan Limited. There is an authorised firm by this name, which is based in Welwyn Garden City in Hertfordshire, however now another firm is also using this name, and is also using the same trading address and FCA interim permission registration number.
What is especially worrying is that the FCA’s warning says that the ‘clone firm’ is using the name UK Fast Loan to conduct a scam, whereby customers pay advance fees for loan applications but the loans are never granted.
The genuine firm also uses the trade names www.fast-loan.co.uk and Fast Loan UK.
Consumers are regularly advised by the FCA to deal only with authorised firms that appear on their Register. However, if another firm is using the identity of an authorised firm, then this advice is of little benefit. The best advice to anyone contacted out of the blue by a financial firm that they have not previously dealt with is to say they will ring back. When doing so, consumers should ensure they always phone back on the number given on the FCA Register, not on any other number which they may have been given. They should also check that they get a dial tone before making the call, as the scammer may have stayed on the line.
The FCA and other organisations have information about common financial scams on their websites. Consumers are advised to read these, and financial advisers may also have a part to play here in educating their clients.
Firms are advised to look out for any signs that they may have been cloned, and if so to contact the FCA for advice.
Customers who do business with unauthorised firms will not be able to make a complaint about that firm to the Financial Ombudsman Service, or make a claim to the Financial Services Compensation Scheme if the firm becomes insolvent.
As part of its enforcement activities, the FCA seeks to prevent firms carrying out regulated activities without its authorisation. Doing so is a criminal offence.