City watchdog launches revamped version of much-criticised financial register

Linda J. Dodson

The City watchdog has launched a revamped version of its heavily-criticised register of financial firms and individuals.

The Financial Conduct Authority said the new financial services register had a simpler design and clearer language.

However, the launch of a new financial adviser directory has been pushed back by three months, sparking fresh fears about fake advisers using the gap in protection to scam unsuspecting consumers.

The financial register is supposed to let consumers check whether the firms they are dealing with are legitimate. About seven million people use it each year and it is a crucial way consumers can guard themselves from fraudsters.

However, Telegraph Money uncovered repeated issues with the accuracy of information on the register. In some cases, investors lost thousands of pounds after following information on the register which later turned out to be incorrect.

In one instance, an investor lost £40,000 after the FCA knowingly left incorrect information on the register for four years. In another case, this newspaper reported that a third party was able to hijack information on the register to give the impression peer-to-peer firm Collateral UK was authorised when it was not.

Following these incidents, the regulator promised to spend millions of pounds overhauling its database.

The FCA said its revamped register has made past actions taken by the regulator against firms and individuals more prominent. The watchdog also promised to regularly review the register to ensure it meets the needs of consumers.

However, the FCA has delayed the launch of a new directory, which would help consumers identify scam advisers.

In December 2019, the regulator stopped updating the records of 25,000 advisers on its register. It promised to launch a new directory to replace the lost information by December 2020, a move which was criticised for creating a year-long gap where consumers would be unable to tell whether their adviser was legitimate.

Experts had warned that this would create an “open goal” for fraudsters who could use the confusion to scam those seeking financial advice. The regulator has now proposed that the launch of the new directory is postponed until March 2021, owing to the coronavirus pandemic.

Jonathan Davidson, of the FCA, said: “The Financial Services Register is an important tool for both the consumers and firms who use it. 

“These changes will make it easier for users to navigate and understand the Register, and in doing so, help them avoid financial harm such as scams by unauthorised firms and individuals.”

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