A man whose struggles with addiction made him vulnerable to high-risk investment strategies and frequent withdrawals from his Hargreaves Lansdown Sipp has written to the regulators to urge them to do more to put preventative measures in place.
At a time when the government's House of Commons is debating increasing barriers to gambling through affordability checks, consumer Fintan Moran has urged financial regulators to make sure the companies they regulate also do the same.
In the letter, sent to Nikhil Rathi, chief executive of the Financial Conduct Authority, and to Abby Thomas, chief executive of the Financial Ombudsman Service, Moran reminded the regulators their purpose was to support people, vulnerable people, including those with mental ill-health and problem addictions.
The letter, seen by FT Adviser, said: "The organisations you lead were put there not to support commercial organisations, but to help ordinary British people. Especially the most vulnerable people, those people with mental problems.
It's happening to the most vulnerable, people like me with mental health problems.Fintan Moran, consumer"People whose brain functioning is broken. People who are unable to think in the same way as normal functioning people. They are also people who have paid into the system for decades, as I have."
Referring to the near-total loss of his original £200,000 Sipp, he said it was "sickening" that he should have found himself in "a terrible situation of absolutely no fault of my own because of a brain distinction".
He said that the organisations set up to regulate financial services had failed him completely.
"I have written over, and over, and over again to simply now be ignored, silenced, and shut down."
The letter added: "I'm one person who has been pummelled beyond belief by both your organisations with zero recourse to a fair hearing.
"It's happening to the most vulnerable, people like me with mental health problems, the very people you say you do your utmost to protect."
He urged them: "Tell me now, today what you are going to do to rectify this?"
Regulatory responses
Responding to the letter, a spokesperson for the Fos - which is funded by industry levy, not taxpayers - said treating vulnerable people with "fairness and compassion" was an "absolute priority for our service".
They said Fos has helped "many thousands of consumers" seek redress for their complaints.
The spokesperson said: “All staff are carefully trained to identify signs of vulnerability at the earliest opportunity.
"It doesn’t matter if it’s financial difficulties, a tough life event, illness or disability – we’re here to listen to people’s concerns, support them with their complaint, and provide a fair and impartial view on their case.
“We’re also committed to always learning and finding new ways to make our service as accessible as possible. Ultimately consumer protection must be at the heart of everything we do.”
Fos has provided training and support to staff who are handling particularly sensitive cases, such as problem gambling, domestic and economic abuse, financial difficulties, and discrimination.
Ultimately consumer protection must be at the heart of everything we do.Fos spokespersonIt is also committed to working with specialist charities and organisations to raise its own understanding of how vulnerability presents in its casework.
The Financial Conduct Authority said it was unable to comment on individual cases.
However, in recent years, it has warned firms strongly to review design features that might risk promoting consumers to take actions against their own interest - such as stock trading apps which used gamification for trading.
In 2023, it unveiled the Consumer Duty regulation, under which companies are explicitly required to pay attention to the needs of customers who may be vulnerable, or have characteristics of vulnerability.
More generally, the FCA has said companies must design their services so customers can make effective, timely and properly informed decisions about financial products and services, and provide better and effective support to customers in vulnerable circumstances.
The guidance it produced in February 2021 on vulnerability aimed to bring about a practical shift in firms’ actions and behaviour.
Mental health problems
According to the Mayo Clinic: "People who gamble compulsively often have substance misuse problems, personality disorders, depression or anxiety.
"Compulsive gambling may also be associated with bipolar disorder, obsessive-compulsive disorder or attention-deficit/hyperactivity disorder."
But despite this, most financial services companies do not have robust enough policies in place that could flag when a client might be exhibiting behaviours that could lead to financial loss.
This is according to gambling charity GamCare, which in an earlier report by FT Adviser, warned: “We have received calls from people who had previously reached out for support around gambling but are now struggling with financial products and we are concerned by this trend.
“While most people might typically look at their investment portfolios on a monthly or quarterly-basis, we have heard from callers who spend up to 16 hours a day trading on volatile investment products.”
We need to have a prevention strategy, just as we do with other health problems.Paul Blomfield MPAt the time, Hargreaves Lansdown told FT Adviser it had "every sympathy" for Mr Moran, but that "there was no more we could do on the matter".
This was backed up by a Fos decision.
When Moran took his complaint to the Fos in 2023, the body said it was "beyond dispute" the firm had reacted correctly to safeguard the Sipp.
In an 11-page Fos decision, seen by FT Adviser, the ombudsman responded to several allegations of failures by Hargreaves Lansdown, over the course of a few years.
But the adjudicator said: "Overall, I do not consider that HL failed in its duty to assess appropriateness in Mr M’s case.
"I consider it beyond dispute that HL reacted correctly in the steps it took to safeguard the Sipp after it became aware of the addiction."
But Moran said he believed he had spoken to Hargreaves Lansdown about the issue "hundreds of times" and that companies needed to do much more to put better safeguards in place to help people like him.
Parliamentary debate
The House of Commons has been debating an e-petition calling for the government to put affordability checks and barriers in place to help prevent problem gambling and protect vulnerable customers.
During the debate, Labour MP Paul Blomfield said: "If this is a health issue, we need to have a prevention strategy, just as we do with other health problems.
"I commend the government for the prevention strategy that they have developed with the gambling White Paper.
"Affordability checks are an important part of that strategy, but it is regrettable that the debate around them is generating more heat than light, as it has done today."
Blomfield said affordability checks and the data behind them was already accessible, adding: "Affordability checks are nothing new, and contrary to suggestions from the industry, background checks on financial vulnerability could be frictionless, making use of already available data.
"This is data that - we should remember - is already used by the industry itself to monitor accounts and, in some cases, withhold winnings from players to regulate their losses.
"The data is there, and the industry is willing to use it in one context. Why not in this context, too?"
Moran made the point that financial institutions, just as gaming companies, have - or should have - such data in existence, and therefore this should be used to help put more safeguards in place to prevent financial loss.
simoney.kyriakou@ft.com
