Article by Phil
The latest figures from the FCA show that they acted to withdraw or amend over 4,000 financial expert promotions in the three-month period from July 22 to September 2022. The highest number recorded.
In addition, they issued over 300 official warnings to unregulated firms about financial promotions. Many of these were targeted at cost-of-living issues. For example, they issued over 60 warnings to firms about Buy Now Pay Later advertising. Most related to inadequate credit warnings.
The most warnings and interventions however continue to be in banking. The percentages were:
- 95% of interventions were sent to authorised firms.
- 46% were about retail investments.
- 24% were about retail banking.
- 24% retail investments.
- Only 5% were about pensions.
The majority of issues around financial expert promotions have arisen online rather than in the press. The biggest concern for the FCA is the unregulated advertising around crypto currencies. Although crypto values have almost halved over the last 12 months, crypto investments continue to be advertised.
The Money and Pensions Service (MaPS) have also just issued increased concerns about the number of scams.
They offered the following tips about what to look out for:
- Contact out of the blue from a company you don’t know.
- “Guaranteed” high investment returns.
- The chance to cash in your pension before you’re 55.
- Once in a lifetime or limited time only offers.
- Overseas investments.
- Complex investments.
- Fixed term investment offers.
The FCA also continue to be concerned about cold calling financial expert promotions. This week a warning was issued about cold calls from CMCs to clients of the Hartley Pensions scheme which is in administration. Cold calling is banned by the FCA.
These interventions are positive signs. But you have to question whether the legal system is providing enough support. The FT Adviser (7/11/22) reported how a “stockbroker” was spared jailed for setting up a £5.5 million fraud scheme. The South American mining fraud duped hundreds of private investors. Reports from the court hearings heard that the ringleader Stephen Todd had previously been disqualified as a director and had convictions for fraud. It makes you wonder a) how someone with previous convictions could get away with it and b) why someone with previous convictions escapes with a suspended sentence.
It doesn’t seem to send the right message to me.
