Our team at ValidPath wanted me to blog this week on the subject of the substantial mortgage scam that has hit the Welsh media recently. I have provided the link for you to follow-up if you are sufficiently interested, but other than observing that one of the convicted scammers appears to go about his business in a state of undress, it was a subject which failed to get the creative juices flowing. If the public are comfortable about dealing with near-naked IFAs, then I guess they shouldn't be too surprised by anything untoward that happens.
Of course, it is worth noting that this scam did require financial intermediation for it to work, and that link in the chain would have been a regulated activity. There is no mention anywhere in the press articles of the involvement of the FCA in the whole investigation and prosecution process...
So, sorry Team, but I was actually rather more distracted by the revelations that the FCA has paid out compensation to a retail customer which was misadvised by a callcentre representative. You can read the full piece here.
I can't say that I was entirely surprised by the news that someone had been misadvised. Whilst we have dealt with some lovely, helpful folks at the FCA's Contact Centre, it is rather infrequent that we are able to receive answers to specific questions that actually help. Frequently, the best that may happen is that we get directed towards an obscure paragraph in the vast, tottering hypertext edifice that is the FCA Handbook, a publication that is predicated upon the idea that circular hyperlink references are a kind of elegant artform, and where users can happily while away the remainder of their sad, unproductive lives in a kind of Alice-in-Wonderlandish parallel universe of Regulatory Rabbit-Warrens.
In practice, that's often the best it gets: an answer which is actually no answer, because it drops you back into a place where it is up to you to interpret the uninterpretable. A recent example is illustrative of the more usual outcomes resulting from the Cry for Help: we had encountered an instance of unregulated investments being promoted to retail customers by a firm which was, itself, unregulated. The actual transaction was being handled by a regulated entity, but the business of promotion was entirely unregulated. Having read the FCA guidance on the subject, which was not nearly specific enough, we rang the Firm Contact Centre in pursuit of clarification.
To be honest, we weren't expecting much, but even so were disappointed. The callcentre worker didn't know the answer, but to be fair he did not seem all that interested anyway. We had to explain several times the differences between the activities we were seeking to describe. He tried to answer the query in a way which showed that he had not understood the issue. Feeling, by now, a little guilty for pressing the matter, we sought to clarify the main points. At that stage, he said that he would have to go and ask someone else. He went away, leaving his 'phone live, and we waited, waited, waited...After a while I could hear his voice, as from a distance, but chatting happily to someone else...I called his name, several times, each time more loudly, but there was no response. After another ten minutes or so, I concluded that he had simply forgotten about us, judging from the animated conversation I could still hear. I put the phone down, having fruitlessly wasted time, querying a matter that, clearly, the FCA care so little about that their frontline personnel are ill-prepared to deal with it.
I would have thought that the interaction between unregulated and regulated activities would actually be a strategically important issue, one which merited attention and concern - and certainly one where clarification is in order. It strikes me that, so long as the FCA interacts with the regulated sector in this way, we will continue to experience crises which are directly linked to ambiguities.