FCA blocks a quarter of firms from consumer investments market
The City watchdog is taking action to tackle harm in the consumer investments market after revealing that it has stopped a quarter of firms from entering into it.
The Financial Conduct Authority (FCA) said it is looking at the tools at its disposal, including more assertive supervision and enforcement action, and will be tougher with firms who want to operate here.
This comes after the regulator published data showing it has stopped one in four firms from entering the consumer finance market between April and September last year – up from one in five the year before.
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During the same period last year, the FCA received 16,400 enquires about possible scams, a rise of nearly a third from the same period in 2020, with cryptoasset, boiler room and recovery room scams making up the top types of scams being reported to the regulator.
Over six months, the regulator opened more than 300 cases relating to possible cryptoasset businesses not registered with the FCA, many of which may be scams. It has 50 live investigations, including criminal probes, into unauthorised businesses, the regulator added.
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Following the increase in reported scams, the FCA is also calling for consumers to be ‘InvestSmart’ and ‘ScamSmart’.
The FCA’s ScamSmart campaign encourages users to find out more about the risks associated with an investment and look at a list of firms the regulator knows to be operating without its authorisation.
Meanwhile, the watchdog’s InvestSmart campaign aims to provide consumers new to investing with information to make better-informed investment decisions.
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“Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be,” said Sarah Pritchard, executive director of markets at the FCA.
“Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”
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