Context
Although this firm does not operate in the insurance distribution sector, the FCA’s findings in this regard will be relevant across all authorised firms.
The FCA has placed directions and requirements on Samweb in relation to failure to meet Threshold Conditions COND 2.5 (Suitability) and COND 2.7 (Business model). The FCA has stopped the firm from carrying on any regulated activities, banned their current financial promotions and prevented them from approving or communicating any further financial promotions. The Directions and Requirements will remain in place until the FCA is satisfied that they can be lifted.
Key points to note
Failures of the firm include:
- Approving financial promotions containing descriptions of entities being registered with the SRA under registration numbers that do not exist, misleading consumers to believe that they are afforded the protections of a regulated entity.
- Purporting to appoint unauthorised firms as ARs to carry on regulated claims management activities. ARs are not permitted to conduct regulated claims management activities. Being unable to register the unauthorised firms as ARs, they registered their names (or names that are substantively identical) as trading names of the firm, making it appear that they are authorised to carry on activities for which they have no authorisation.
- Approving financial promotions which do not substantiate the basis of a mortgage securitisation claim in a way that is credible. The promotions exaggerate the likelihood of a mortgage securitisation claim succeeding and the outcome that prospective claimants may be entitled to. The approval of mortgage securitisation financial promotions appears to be a material component of the Firm’s business strategy.
- Failure to obtain the approval of the FCA of its change in the control of the Firm.
Next actions
None – for information and awareness.