The Financial Conduct Authority has publicly censured Horn Express Ltd, formerly known as Qaran Express Money Transfer Ltd, for failing to properly segregate customer funds, marking the first time the regulator has taken enforcement action against a small payments firm.
Horn avoided a £136,687 fine as it produced evidence that imposing the penalty would have caused it serious financial hardship.
The firm is a money transfer company authorised by the FCA under the payment services regulations 2009. It has not traded as a money transfer business since early 2012.
Horn customers commonly used its services to transmit money overseas from the UK.
The FCA said that at times during the period December 2009 to August 2011, the firm mixed customer funds with its own monies in the same bank account and failed to record accurately how much of the money in that account was customers’ funds.
From December 2009 until December 2011 the FCA said the company also failed to properly reconcile the customer funds held in its bank account.
The regulator also said that Horn also failed to sufficiently supervise its branches and agents.
Bill Sillett, FCA head of retail enforcement said: “This case highlights the wide remit of the FCA; we are not just the regulator of firms authorised under the Financial Services and Markets Act.
“We will use our enforcement powers to the full extent and this case, the first of its kind, demonstrates that we will take action where breaches are identified. It is not acceptable that customers’ monies are put at risk by firms, whether in the financial services or payment services sector, and we will take action to tackle this.”
