Protecting consumers from harm at the hands of financial fraudsters has long been a real headache for the FCA: there is understandable public and political pressure to see effective action taken, but the FCA's responsibility to police activity outside the perimeter is not clear. The Enforcement Division has brought a series of high profile criminal prosecutions against those engaging in fraudulent activity, and currently has 50 investigations underway into unauthorised activity.
The problem is that these cases are only resolved long after victims lose their money, and so the FCA is adopting new more proactive tactics as such scams increase in number and reach by moving online. In a speech yesterday Mark Steward outlined the FCA's work to identify and take down online adverts and educate social media firms regarding their obligations when hosting financial promotions.
The speech also highlighted the role the FCA expects regulated firms to play in this effort, building the FCA's Warning List of firms to avoid into their financial crime systems and controls and performing more intrusive due diligence on such firms. Firms that fail to act on this risk costly investigation into whether their (in)action has enabled fraudsters to operate.
Regulated firms who let down their guard, especially in assisting firms on our Warning List, may well face action from us for doing so as well. Mark Steward, Executive Director of Enforcement & Market Oversight