07May

The FCA has adopted a similar position regarding the proposed scheme of arrangement of a major doorstep lender to the stance it took when another one of these schemes was mooted by a guarantor lender a short time ago. Essentially, the regulator has made clear its concerns over the proposed scheme, but will not take action to block it, because the alternative of the firm pursuing an insolvency solution would mean that customers with complaints would receive an even smaller proportion of the amount they were owed by the company.

The FCA’s main concerns with the scheme are:

(a) customers with valid redress claims stand to receive significantly less than the value of their claims; and

(b) the methodology for assessing claims under the scheme will not deliver the same high standards of accuracy and fairness as would be the case if customers had recourse to the Financial Ombudsman Service

The scheme looks set to go ahead, provided the lender’s customers approve it when asked to vote in July.

The FCA has commenced legal proceedings against two individuals accused of conspiracy to commit fraud by false representation. It is alleged that where mortgage applicants had insufficient income to justify the proposed mortgage, one of the individuals charged the customer a fee, which was used to pay the other accused individual so that he might create false employment or self-employment documentation to support the application. The first individual is also charged with providing regulated financial services without authorisation.

The new Mortgage Guarantee Scheme has commenced. Under this scheme, if buyers can provide a 5% deposit on a property valued at up to £600,000, they will benefit from a Government guarantee on their 95% mortgage. However, some of the largest banks have said they are not prepared to lend on new-build properties under this scheme, citing concerns over rapid house price inflation.

In a new report, think tank New Financial says it has identified 546 cases of firms who have made some form of significant move away from the UK since Brexit. This might have involved relocating staff, assets or operations from the UK, expanding offices in other states or setting up new entities in other territories. The 546 figure actually involves just 423 different firms, as some have made significant moves to more than one country.

Almost one-quarter of the moves (135) have been to Dublin. Paris is another popular destination, accounting for 102 moves (19% of the total), followed by Luxembourg with 95 (17%). There have also been significant re-locations to Frankfurt (63 firms, 12%), Amsterdam (48, 9%), Madrid (18, 4%) and Brussels (15, 3%).