The Financial Conduct Authority (FCA) has confirmed that an Oxford-based insurance and credit broker has been stripped of its permission to operate in the financial services arena. This comes after the firm failed to pay a compensation award that it was requested to pay by the Financial Ombudsman Service (FOS).
The firm is now in liquidation, so it could be argued that the FCA’s action will have no practical impact. However, all authorised firms need to be in no doubt that the regulator would impose its most serious sanction should a firm fail to pay even one FOS award to a customer. Firms can appeal a decision made by an FOS adjudicator to an ombudsman within the FOS, but if the Ombudsman finds against them, they have no further right of appeal, save for taking the matter to a judicial review, and must pay the compensation award even if they continue to dispute the decision.
In this case, the firm unsuccessfully appealed to the Tribunal to have their ban set aside. However, their submission simply explained why it believed that the FOS decision was unfair, and the FCA has no power to overturn an FOS decision.
The FCA’s Final Notice says:
“It appears to the Authority that [name of firm] is failing to satisfy the suitability Threshold Condition, in that the Authority is not satisfied that [name of firm] is a fit and proper person having regard to all the circumstances. [name of firm] has failed to satisfy the Authority that it is conducting its affairs in an appropriate manner, having regard to the interests of consumers. Specifically, [name of firm] has failed to comply with the FOS Award made against it on 17 December 2014, despite repeated requests by the FOS and the Authority that it do so.”
A client of the firm, referred to as Ms B, made a complaint to the FOS about the sale of a Professional Let Home Insurance Policy, a specialist landlord’s insurance policy. The crux of her complaint was that the broker had failed to highlight important exclusions in the policy terms. These exclusions allowed the insurer to refuse her claim, made following a break-in, on the grounds that there was no liability for theft and malicious damage during periods where the property was not furnished for normal habitation. At the time of the break-in, the property was being redecorated at the end of a tenancy.
The FOS upheld Ms B’s complaint and directed the firm to pay Ms B the value of her claim, with additional interest calculated at 8% per annum. Ms B accepted this FOS decision.
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