FCA concerned about Brexit-related scams

FCA concerned about Brexit-related scams

The Financial Conduct Authority (FCA) will be publishing information for consumers on the UK's exit from the European Union over concerns they might be targeted with Brexit-related scams.

According to minutes of the regulator’s board meeting on October 25, published today (November 30), a key concern is that consumers are able to make "timely and informed decisions about how to respond to changes that might impact them".

The FCA will implement a phased approach to communication with consumers.

The first phase will include the publication of high level information about how the EU withdrawal may impact consumers (both UK and EEA), and steps they may wish to consider taking to protect themselves from fraud.

The board had been presented with an analysis of the key impacts of the EU withdrawal on consumers of retail financial products and services, including areas of potential harm such as "Brexit-related scams, economic or market downturn, as well as uncertainty or changes resulting from the future of the regulatory/legal framework".

The analysis also included the work that had been undertaken to mitigate these risks and to minimise disruption and the recommended approach to tackling gaps.

The analysis was based on the scenario of a disorderly exit in March 2019, where there was no deal between the UK and EU, the document revealed.

In a meeting on this matter with an FCA official, the Financial Services Consumer Panel (FSCP) had expressed the need for the FCA, Financial Ombudsman Service, Financial Services Compensation Scheme, Money Advice Service, trade associations and firms "to be ready with the right messages for consumers".

According to the minutes, the FSCP suggested that a working group of these stakeholders should be established now, to be able to respond quickly and with consistent messages.

FTAdviser reported yesterday (November 29) that the watchdog would prefer an implementation period rather than exit the EU without agreement next March, claiming the former carried less risk to the financial services industry.

In a letter to Nicky Morgan MP, Andrew Bailey, chief executive of the FCA, had said the regulator believed a ‘no-deal’ Brexit would create "significant challenges and risks" in the market.

Mr Bailey said this risk would manifest itself in terms of firms' readiness, potential market disruption and insufficient public-policy solutions put in place on the side of the EU.