Watchdog promises overhaul after investigation
The head of the City watchdog has written to MPs to promise that improvements will be made to a crucial industry register amid concerns over the amount of incorrect information being provided to consumers.
In a letter to the Treasury Select Committee, seen by Telegraph Money, Andrew Bailey, chief executive of the Financial cial Conduct Authority (FCA), acknowledged wledged that the organisation had ad to stamp out errors in the he Financial Services Register. ister. He said he was aware of f “issues in data quality”.
A recent Telegraph Money investigation disclosed how fraudsters had taken en advantage of out-ofdate information on the e register to pretend to be e an authorised financial firm. One reader, Gilbert rt West, 69, lost £44,275 to scammers who posed d as a legitimate firm that t had in fact ceased trading. ng. The regulator had known wn about this for more than n four years but had failed to update the register. In his letter Mr Bailey said the register had grown from 400,000 firms and individuals to 750,000 in the past decade. He said the regulator was overhauling its processes to ensure firms that entered administration were immediately flagged on the register. This was a direct result of the case highlighted by this newspaper, he said. The chief watchdog wa said his organisation had made it easier for consumers to see information on the website, web but added that further im improvements would require systems sy upgrades. Firms will be required to keep th their own information up to date and the regulator will have the power to fine tho those that display incorrect inf information. This will be little co consolation to people who have already lost te tens of thousands of p pounds because of the reg regulator’s lax record keep keeping. Victims have no legal right r to compensation, even if their decision to invest hinged entirely on the incorrect information provided by the FCA.
The regulator initially rejected Mr West’s claim but later agreed to pay him half the sum lost. This newspaper has uncovered eight further cases from 2017 in which complaints were upheld. Three of the complainants were paid a collective £12,359 as a result of incorrect information on the register.
Nicky Morgan MP (pictured), who chairs the Treasury Committee, said: “Following reports of inaccurate information on the Financial Services Register, Mr Bailey has acknowledged the need to overhaul it. With growing public awareness of the register, and improvements being made to help consumers, the need for a complete and up-to-date register is paramount.” Mrs Morgan said she planned to raise the matter with the FCA during its next evidence session.