In a report today the regulator has said it took sweeping action in 2020 to protect consumers.
The regulator said its aim with the clampdown was to “stop and potentially disrupt harmful firms and activities.”
The FCA said it took action in the first 10 months of 2020 when many consumers found their finances under pressure due to the Coronavirus pandemic.
During the first 10 months of 2020 the FCA:
• stopped applications for authorisation from 343 financial services firms and individuals, almost 1 in 10 applications
• opened over 1,500 supervisory cases involving scams or higher risk investments
• sifted through over 24,000 reports of unauthorised activity and published over 1,000 consumer alerts – an 82% increase on the previous year
The FCA said it had pursued action against a number of firms found to have caused “consumer harm.”
This included pursuing 47 enforcement investigations against unauthorised businesses in 2020, securing almost £6m to be returned to consumers and obtaining court orders that over £14m must be returned to consumers.
Fines totalling more than £80m were issued to regulated firms and individuals in 2019 and 2020
On pension transfers the regulator said 130 firms were barred from providing DB transfer advice in 2020.
As a result the FCA said that the proportion of pension scheme members recommended to transfer following advice fell from an average of 69% in October 2018 to 57% in March 2020.
The FCA is also stepping up its warning to firms to “use it or lose it” when it comes to their regulatory permissions. This follows concern about the misuse of regulatory permissions. The FCA has asked all firms to review their permissions so that only permissions they need are retained.
Sheldon Mills, executive director, consumers and competition said: “In some areas…the consumer investment market is not working as well as it should and too often consumers are offered unsuitable products or advice.
“Protecting consumers and ensuring they have confidence in the suitability of advice they receive is a key priority for the FCA and today’s report highlights some of the work we are undertaking to achieve this.”
The FCA has also today launched the next phase of its ScamSmart Investment campaign. This will warn consumers of the increased threat of clone investment fraud, alerting them to the key warning signs and driving investors to the FCA’s warning list of firms to avoid and the FCA register of authorised firms.