The Complaints Commissioner has ordered FCA to pay £200 compensation to an aggrieved investor who invested in a clone firm which was not at the time listed on the FCA Register.
A scammer had cloned the details of a Luxembourg firm that had passported in. The complainant said that, when he checked its details on the Register:
- there was no warning of the cloning; and
- the wording FCA used about FSCS coverage gave him reason to believe FSCS would protect his investment, which was not the case.
The Complaints Commissioner found that:
- the FSCS wording was misleading, and recommended FCA change it (which it now has done);
- FCA did update the Register with a notice about the cloning as soon as it had sufficient information to do so. But in its response to the complaint it said it had followed all proper procedures in order to do so. The Complaints Commissioner found that it had not. It is possible that, had it done so, it may have discovered the information earlier and so put up the warning earlier. Internal communications failures within FCA had been a theme the Commissioner had often had to address;
- it had taken FCA far too long to resolve the complaint, and because of that, it was still holding the customer data when it suffered a data breach relating to complainant data (this was the matter of a separate complaint);
- it was surprising FCA had not offered compensation for the delay and, even worse, the complaint was still not considered thoroughly and the conclusion was not supported by evidence.