The UK Financial Conduct Authority (FCA) instructed authorized firms to amend or withdraw 2,211 offers in Q1 2024.
The retail investment and retail lending sectors had the highest modification/withdrawal results, totaling 85% of the FCA’s interventions with authorized firms.
Some of the most common breaches involved receivables management companies, credit brokerage firms and contract for difference (CFD) providers.
On 8 January 2024, the consent amendment – which delayed the start of the direct offer financial promotion (DOFP or ‘back end’) rules introduced by Policy Statement 23/6 – expired. The FCA carries out inspections to check the level of compliance with these rules and will act where it finds breaches, using its supervisory tools and potentially enforcement action where appropriate.
On February 7, 2024, the financial promotions approval portal went into effect. This means that companies wishing to approve financial promotions on behalf of unauthorized companies outside their group must apply to the FCA for an approval licence. Companies that applied before February 7 can take advantage of transitional arrangements that allow them to continue to approve tenders while their application is being considered. Reporting requirements also came into effect from 7 February for all companies holding an approval license or benefiting from transitional arrangements.
The FCA proactively reviewed the marketing and promotions of claims management companies for home damage claims. In the first quarter of 2024, following the FCA’s engagement with 7 authorized firms, this resulted in 83 amendments/withdrawals, while the FCA is focusing its work on non-authorized firms. work to eliminate illegal financial promotions.
In the first quarter of 2024, the FCA received 5,722 reports of potential unauthorized businesses.
The regulator has issued 597 notices to unauthorized companies and individuals. 11% of these relate to clone scams, where fraudsters use details such as the name and address of authorized companies and individuals and a ‘company registration number’ (FRN) to indicate they are genuine. Many of these involved violations of the internet financial promotion restriction. In almost all cases the FCA asked for the websites to be taken down.