The Complaints Commissioner heard the investor purchased bonds from a company purporting to be a credit union in 2016 but before doing so checked the FCA’s register, which told them the “credit union” was authorised.
But in reality it had been dissolved in 2012, which the FCA had been aware of yet it had not updated its register because it prioritised making other updates to the list of authorised firms.
In upholding the investor’s complaint, commissioner Antony Townsend said: “Consumers have a duty to undertake their own checks to avoid scams: there are many cases of scammers using the names of properly authorised firms to dupe investors, and the FCA cannot be held responsible in such cases.
“Against that, consumers are entitled to expect that the register will be kept competently.
“This was more than a simple oversight. The record clearly shows that there was an awareness of the situation, but no effective action was taken until [the] complaint was lodged. Worse, the records which I have studied give me no confidence that the responsible departments understand the seriousness of the FCA’s failings.
“While it is understandable that the FCA should be protected from general liability for consumers’ losses, this is not an ordinary case. The FCA (and the FSA before it) for some four years sat on information which should have prompted action to remove the credit union from the register.”
Mr Townsend said the FCA should not be held accountable for the entirety of the investor’s losses – which amounted to £44,275 – but instead should pay 50 per cent – or £22,137.50.