UK FCA refuses to compensate scam victim despite register mistake

A fake Austrian investment firm

The UK Financial Conduct Authority (FCA) has refused to reimburse a scam victim despite a mistake of the regulator in its register. In May 2018, a woman from London lost £13,000 in what she thought was a legitimate Austrian company registered with and supervised by the UK watchdog. However, it turned out that the perpetrators had taken advantage of an incorrect listing on the FCA’s official register from 2005 to create a fake investment firm.

The victim turned to the Complaints Commissioner, which oversees complaints against the FCA. The Commissioner concluded the regulator should make a goodwill payment of 50 percent of what she lost due to its ‘serious failings’ that ‘contributed to her financial loss’.

Despite the Complaint Commissioner’s recommendation the FCA refused to pay out, claiming that the victim ‘received sensible guidance from the FCA before investing, which was not followed.’

A lax regulator?

In his eight-page report in April this year, Commissioner Antony Townsend noted that this was the second case in 12 months where the FCA’s lax administration of its register had played a role in an investor becoming a victim of fraud.