UK fintech regulator puts bigger fines on the menu
Don’t be fooled, but from 1 April 2019 complaints about the actions of UK fintech firms will face far heftier fines.
The UK’s Financial Conduct Authority (FCA) has confirmed that the Financial Ombudsman Service will soon be able to require financial services firms to pay significantly more compensation to consumers and businesses.
Andrew Bailey, chief executive of the FCA, says: “Consumers and small businesses struggle with the cost and time needed to take firms to court, so it is essential they can receive fair compensation from the Financial Ombudsman Service when things go wrong.”
He adds: “We have listened carefully to the feedback we have received and believe our approach is right and will bring benefits to both the consumers and micro-enterprises.”
From the start of next month, the current £150,000 limit will increase to £350,000 for complaints about actions by firms on or after that date. For complaints about actions before 1 April that are referred to the ombudsman after that date, the limit will rise to £160,000.
The FCA has also confirmed that both award limits will be automatically adjusted every year to ensure they keep pace with inflation.
The new award limit will come into force at the same time as the extension of the service to “larger” SMEs. These are firms with fewer than 50 employees, annual turnover of under £6.5 million and an annual balance sheet total of under £5 million. An additional 210,000 SMEs will be able to complain to the ombudsman.
To its credit, the FCA is busy – or as I like to call it – doing its job.
Last month, it published its list of mandated and voluntary information on current account services. Barclays reported the most incidents – with 41 in the nine months between 1 April 2018 and 31 December 2018.
It also displayed an iron fist when it comes to anti-competition in the asset management space.