The “pig butchering” scam is not new but has enjoyed a rapid rise in recent years. So much so, that virtually everyone reading this blog will have been an intended mark at some point, probably without knowing it. Indeed, if you have ever received a message from an unknown number with a random message that apparently wasn’t intended for you such as “sorry I missed my appointment” or “Hi mum, this is my new number” then that probably wasn’t an innocent mistake, it was the start of the long con of the 2020s.
WHO PAYS THE PRICE OF AUTHORISED PUSH PAYMENT FRAUD?
Following on from our recent Blog post about UK Finance’s half-yearly fraud update, in an article published today with the International Banker we look at the increasingly common authorised push payment (APP) fraud and consider what can be done and who might be liable?
Too soon to move on? Supreme Court changes limitation in secret commission cases
The Supreme Court has today provided important clarification on when “deliberate concealment” or “deliberate commission of a breach of duty” by a defendant will extend the limitation period for bringing claims.
The decision is bad news for financial services firms affected by PPI mis-selling claims and other claims in which firms are accused of making secret commissions on financial products, such as interest rate swaps and other derivatives.
UK Finance – Fraud Update
UK Finance has recently published its half yearly fraud update for the first half of 2023, its findings are based on data reported to it by its members, which include financial providers, credit, debit and charge card issuers and card payment acquirers.
Opening salvo – enforceability of litigation funding agreements in a post-PACCAR world?
The recent interim judgment of Therium Litigation Funding A IC v Bugsby Property LLC [2023] EWHC 2627 (Comm) appears to give us an early indication of what might become key battlegrounds between Third-Party Funders and certain funded litigants in the wake of the Supreme Court’s impactful determination in R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28.
Push-ed Back – Supreme Court Considers Quincecare Duty for Authorised Push Payment (“APP”) Fraud Victims
On 12 July 2023, the Supreme Court delivered its widely anticipated judgment in Philipp v Barclays Bank UK PLC. In doing so, the Court has gone back to basics to explain the basis for and scope of a bank’s duty to its customers, and has brought the Quincecare duty back to a narrower footing.
By overturning the Court of Appeal (covered in our previous blog here), and varying the original High Court ruling (which we addressed in another previous blog post), the Supreme Court has again shown that it will not hesitate to redraw the boundaries of duty where it deems them to have been overly broadened. The case also offers useful clarification on the extent of the Quincecare duty, and of banks’ obligations to their customers more generally.
The decision should be a welcome one for banks, notwithstanding that the Financial Services and Markets Act 2023 will soon provide victims of many APP frauds with a different route to recompense (as well as the Contingent Reimbursement Model Code).
Financial Promotions Data Analysed – An Increase in Intervention
Earlier this year, the Financial Conduct Authority published its analysis of its financial promotions data for 2022. That report sheds some interesting light on the FCA’s actions taken against authorised firms, and unauthorised entities and individuals, for breaches of financial promotion rules.
The standout message is clear – the FCA has significantly increased its interventionist activity, in response to what the FCA has said is poor financial promotions compliance.
Financial Ombudsman Service compensation limit increased again – by more than 10%
The Financial Conduct Authority confirmed last month that the limit for compensation that can be awarded by the Financial Ombudsman Service (“FOS”) will be raised from £375,000 to £415,000, for complaints made after 1 April 2023 relating to acts or omissions on or after 1 April 2019 – an increase of over 10%.
A lower limit of £190,000 applies to any complaints made from 1 April 2023 relating to events that occurred prior to 1 April 2019 – again an increase of over 10%, from £170,000 in 2022.
Ready or not, here comes the Consumer Duty
Since July 2022 when the FCA published its rules and guidance to implement the Consumer Duty, much ink has been spilled on what it will mean for affected firms. Now, with the clock ticking down to implementation on 31 July 2023, the FCA has published the findings of its review of a number of larger firms’ plans for complying with the Duty.
“Could do better” is the overall mark on the industry’s homework so far.
What will the Consumer Duty involve?
To recap, the reforms will involve:
- An overarching Consumer Principle requiring firms to act to deliver good outcomes for retail customers when selling products and services.
- Cross-cutting rules providing clarity on FCA expectations, which will require firms to act in good faith, avoid causing foreseeable harm, and enable and support retail customers to pursue their financial objectives.
- Rules relating to the four outcomes the FCA wants to see, around: appropriateness of products and services; transparent pricing and fair value; consumer understanding; and consumer support.
FCA tightens appointed representative regime
In August 2022, the FCA released a policy statement introducing improvements to the appointed representative (“AR“) regime. In its policy statement, the FCA provides feedback on its earlier consultation, and sets out new rules to make authorised financial firms more responsible for their ARs.
In its press release, the FCA says that whilst some principal firms do effectively ensure their ARs comply with rules, “many do not adequately oversee the activities of their ARs“. It says its new rules will “prevent consumers being mis-sold or mis-led by ARs and will prevent misconduct by ARs undermining markets operating fairly and safely“.
