The Financial Conduct Authority has removed permissions from two more credit brokers suspected of offering investments as concern grows about a network of credit brokers misusing their permissions.

The FCA has removed the permissions of Falcon Financial Solutions Ltd and Thestral Financial Services Ltd.

Neither firm is now permitted to carry out any regulated activities.

Thestral is not authorised by the FCA but was registered as a Small Payments Institution.

The regulator acted after discovering the firms are linked to Cavendish Incorporated Ltd, one of several credit brokers recently subject to an FCA consumer warning.

The regulator has concerns that Falcon and Thestral may also be offering investments to consumers.

In its latest warning the watchdog said it has concerns that customers who have invested with Falcon and Thestral could lose all of their money. Any investments would be unlikely to be protected by the Financial Services Compensation Scheme.

Cavendish appeared to have been carrying out investment activities without permission and the FCA believes consumers may have invested substantial sums in bonds or loan notes issued by Cavendish.

The regulator also believes consumers may have been misled about the scope of Cavendish’s permissions and the protection afforded to their investments.

The FCA consumer warning announcement said: “Neither Falcon nor Thestral has ever been permitted by the FCA to provide regulated investment services. Any investments offered by either firm could pose significant risks to consumers due to the potential lack of regulatory protection.

“Neither firm disclosed any connection to Cavendish when they applied to the FCA. We have attempted to engage with both firms to understand their connection to Cavendish and other firms, but they have not responded. We believe there is a significant risk that they may have offered, or been intending to offer, investments to customers which were not protected.”

The FCA has been investigating a network credit brokers and payment services firms that it believes are offering investments to consumers which may not be protected.

In December the regulator said it had “serious concerns” about Renaissance Advisory Ltd of Ilford, Essex. It has stripped Renaissance of its Part 4A permission to conduct regulated activities and removed the firm’s second credit broking licence. 

Renaissance is being linked to similar activities undertaken by Cavendish Incorporated, Grosvenor Associates Ltd, Sentor Solutions Commercial Ltd, and Marvell Enterprise Ltd. These firms were only authorised by the FCA to conduct credit broking activities. 

The regulator believes that these firms, and the investments they may have been offering, may be connected.