Financial Conduct Authority
Losses to pension customers - FCA bans and fines individuals following Upper Tribunal decision - 9 May 2022
The FCA has prohibited five directors of financial advisory firms from working in financial services and fined them over £1 million, after they caused significant losses to pension customers. The decisions follow an extensive 300-page judgement issued by the Upper Tribunal (Tax and Chancery Chamber) (the Tribunal) in which the five directors unsuccessfully challenged the FCA’s decisions.
On 6 May 2022, the Tribunal published a decision which found that Andrew Page, Thomas Ward, Aiden Henderson, Robert Ward and Tristan Freer had failed to act with integrity, having either acted dishonestly or recklessly. Each had been directors at failed financial advice firms who provided unsuitable advice to over 2,000 customers causing them to place their pensions in high-risk financial products in self-invested personal pensions in which Hennessy Jones, an unauthorised firm, had a significant financial interest. These customers had been referred to them by Hennessy Jones which was also involved in designing the pension advice process used by these firms.
This scheme caused significant losses of over £50 million to over 2,000 consumers who have been compensated now by the Financial Services Compensation Scheme (FSCS). As well as the negative impact on consumers, this also affected other financial services firms which have to contribute to the costs of the FSCS.
The Tribunal found that all the five individuals allowed their 'instincts and values to be overridden' and their judgement to be compromised for personal financial gain. They failed to scrutinise where their customers’ pension funds were being invested and the scale of these shortcomings has led to large penalties being imposed for directors of small IFA firms.
In the FCA’s press release, Mark Steward, Executive Director of Enforcement and Market Oversight noted that this case places firms’ relationships with unauthorised introducers in the spotlight. He cautions that, “all firms should pay heed and scrutinise these relationships to ensure standards of integrity, due diligence and fair treatment of customers are uppermost”.
Thomas Page & Others v The Financial Conduct Authority  UKUT 00124 (TCC)
Payment Systems Regulator
Interchange Fee Regulation - PSR publishes Decision Notice - 12 May 2022
The Payment Systems Regulator (PSR) has published a Decision Notice (the Notice) sent to National Westminster Bank Plc, Royal Bank of Scotland Plc, Ulster Bank Ltd and Coutts & Company (the Banks). The Notice imposes a financial penalty of £1.82 million on the Banks for failing to comply with articles 4 and 10(5) of Regulation (EU) 2015/751 on 29 April 2015 on interchange fees for card-based payment transactions (the Interchange Fee Regulation) by overcharging interchange fees on credit cards.
The PSR explains that the Banks were all members of NatWest Group during the ‘Relevant Period’ from 24 March 2016 and 14 March 2018. During this time, the Banks incorrectly treated a number of credit cards as being ‘commercial’ when they should have been treated as ‘consumer’ cards. The fees charged by the Banks on these cards were therefore not capped and were set at too high a level, and as result both acquirers and ultimately merchants were overcharged. The PSR found that the Banks wrongly profited from almost £1.2 million in excess interchange fees during the Relevant Period.
The PSR notes that the Banks agreed to settle at the earliest possible stage and therefore qualified for a 30% early settlement discount. Were it not for this discount, the PSR would have imposed a financial penalty of £2.6 million on the Banks.
The financial penalty must be paid by the Banks to the PSR by 26 May 2022.
PSR Decision Notice: National Westminster Bank Plc, Royal Bank of Scotland Plc, Ulster Bank Ltd and Coutts & Company
Updated webpage: Enforcement cases