One way in which the Financial Conduct Authority’s website staff have been very busy of late is in updating the Warnings page, which is seeing more new entries than ever. This page is updated every time the regulator finds out about a firm which is conducting some form of financial service in the UK which would require the FCA’s authorisation, but where the firm in question has not in fact obtained that permission from the FCA. In other words, the firm in question is committing a criminal offence.

At best, an individual customer who does business with an unauthorised firm is relinquishing the chance to have the protection of the Financial Ombudsman Service should anything go wrong – and the protection of the Financial Services Compensation Scheme if that would normally have applied to the financial product or service in question. At worst, an unauthorised firm may be a front for a scam, or another criminal activity, and an unwary customer could lose a great deal of money.

Many of the unauthorised firms listed on the Warnings page are also ‘clone’ firms, which could have serious consequences for the genuine firm that has been cloned. Unfortunately, sometimes an unauthorised firm will use the name of an established, authorised firm (or something similar to the genuine firm’s name, or one of their trading names), and may also clone some of their details, such as their address, to add an air of authenticity. Any firm that believes it has been cloned is advised to call the FCA’s Firm Helpline immediately.

The number of warnings about unauthorised firms added to the site in March was in excess of 20 every week. Some of these firms had very generic names, such as ‘My Money Market’, ‘Financial Loan Service’ and ‘Claims Consultant’. The issue of unauthorised firms also seems to be a problem in every sector of financial services.

Unauthorised firms which have appeared on the Warnings page of the FCA site are listed on the Financial Services Register with an exclamation mark listed alongside the word Unauthorised. If it has been identified that a clone firm is in existence, then a suitable warning symbol appears in the Register entry of the genuine firm as well, warning visitors to the site that it is possible that someone claiming to represent a firm with this name may not be what they seem.

The FCA also advise every consumer to check that the firm that has approached them really is authorised, either by checking the Register or by calling the FCA. Unfortunately, very few ordinary consumers are likely to be regular readers of the FCA website. It is also undoubtedly the case that the number of unauthorised firms for which warnings appear on the FCA site represents just a small fraction of the total number of rogue companies who are actually operating, and who are causing untold damage to UK consumers every day.

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