Industry setting its own standards – FCA backs code for unregulated activities

The FCA has backed standards penned by independent body, the Lending Standards Board (“LSB“),  that aim to ensure finance companies conduct themselves properly when they offer unregulated products.  This is despite some fears in the industry that FCA backed voluntary codes may confuse consumers.

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The never ending story? PPI complaints jump 72% at end of 2019

The deadline for consumers making complaints to businesses for mis-sold PPI was 29 August 2019. In light of that deadline, the Financial Ombudsman Service (“FOS”) received a 72% rise in complaints in the last quarter months of 2019. Data released last week showed the total number of PPI complaints in that period was more than 2 million.

ombudsman

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FCA takes action on persistent credit card debt

The FCA is taking steps to address problems faced by borrowers who are in persistent debt due to ever increasing credit card balances. Where a credit card customer is in a situation where, for a period of 3 years or more, they have been paying more in interest, fees and charges than they are paying off their balance, the FCA has told credit card companies they must propose and agree a plan with such customers to resolve the situation.

The FCA has prescribed guidelines that credit card companies must pay heed to so as to ensure that they are acting in the best interests of consumers. The guidelines include:

  • Addressing the fact that customers may not respond to letters from their credit card company where they have been in persistent debt by encouraging customers to speak with their credit card company to discuss potential payment arrangements. The guideline does not go as far as requiring credit card companies to actively contact their customers by telephone although that may well come to be viewed as best practice as this new regime takes hold.
  • Where a customer simply can’t afford the options proposed by their credit card company, then the company must actively consider taking steps to alleviate the financial burden by, for example, reducing or waiving interest, fees or charges. No guidance is given as to what is required of a credit card company to establish a customer’s true financial position and it may be that further guidance is offered on this at a later stage.
  • Credit card companies are not permitted to simply cancel a credit card of a persistent debtor without an “objectively justifiable reason”. Quite what this means remains to be seen.

The FCA has made it clear that if it considers a credit card company is not offering its customer an appropriate level of help, it will “not hesitate to take action”. The FCA has openly expressed the view that if credit card companies approach these new requirements correctly, then they anticipate savings of up to £1.3bn in lower interest charges. It is estimated by sources external to the FCA that about 1.78 million are stuck in persistent credit card debt and therefore this could benefit significant numbers of customers provided they actively engage with their credit card company.

Dear CEO letter to asset managers warns of further FCA focus on the sector in 2020

On 20 January 2020 the FCA published a Dear CEO Letter to Authorised Fund Managers (AFMs). The letter is directed at AFMs that predominantly directly manage mainstream investments, or advise on mainstream investments, excluding wealth managers and financial advisers. The letter outlined the FCA’s supervision priorities for those firms, and the FCA will expect firms to take appropriate action. Asset Management Firms (AMFs) may also be asked to take part in work related to these priorities.

The supervision priorities outlined in the letter are: Continue Reading

Will English financial services litigators be out of work following Brexit?

Brexit Day has come and gone. The Big Ben Bongs (try saying that after a few glasses of English sparkling wine) have sounded and Britain has broken the shackles of the European Union and entered a new era of free trade deals, blue passports and control of our borders. If this means paying a bit more for Chablis and camembert and waiting in line longer on our return from Marbella, these are small prices to pay, apparently.

In truth nobody really knows whether we will be better off outside of the European Union (or whether chlorine washed chicken is really worse than the European alternative). Some banks and multinationals have moved operations away from London and the fear in the City is that Britain will become a less attractive place to do business. Could this have a knock-on effect on businesses’ desire to settle their disputes in the High Court? Are these fears, combined with the potential uncertainties on enforcement likely to influence drafters’ choice of law and jurisdiction clauses in financial services agreements? Continue Reading

English Court confirms that cryptoassets are property

The English Court has now made a clear ruling; “I consider that cryptoassets such as Bitcoin are property“, Bryan J concludes in his judgment in AA v Persons Unknown.

The Court has granted another interim injunction over Bitcoin, this time held in an account of a cryptocurrency exchange after it had been transferred to the exchange as part of a cyber-attack on a Canadian insurance company.

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Court refuses defendants’ document request at £86million FCA pensions’ trial

Judge holding gavel in courtroom

Last week, the Court prevented two unregulated introducers and their directors (the “Defendants“) from seeing documents linked to an investigation by the FCA into pensions’ providers and financial providers that did business with the Defendants. The Defendants are currently on trial in the High Court and stand accused of having given unauthorised and misleading advice about retirement investments to consumers.

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Banks avoid liability for failed tax relief plans under film-investment scheme

Judge holding gavel in courtroom

Litigation surrounding film finance schemes continues to rumble on in the High Court.  Earlier this month, the High Court in Barness v Ingenious Media Ltd [2019] EWHC 3299 (Ch) granted applications by two banks Coutts and Natwest (“Banks“) to strike out a number of lender claims in a case that is part of the “Ingenious litigation”.

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