The number of complaints submitted to the Financial Conduct Authority almost doubled last year, driven by investor concerns over a collapsed mini-bond provider and unregulated peer-to-peer lending platform.
In the last financial year the regulator received 1,075 complaints, a "significant" increase of 92 per cent on the 557 received in 2017/18.
The FCA said this increase was largely due to the number of complaints involving two firms, London Capital & Finance and the Collateral Companies, prompting 550 investors to make complaints to the regulator.
In February last year the unauthorised peer-to-peer lending platform operated by Collateral (UK) Ltd, Collateral Sales Ltd and Collateral Security Trustee Ltd was placed into administration, with none of the companies holding valid authorisation or permission to carry out regulated activities.
LC&F went into administration in January owing more than £230m and putting the funds of some 14,000 bondholders at risk, after signing clients up to fixed-rate Isas promising 8 per cent interest.
The company had invested clients' capital into mini-bonds used to issue loans to small businesses, with the FCA freezing the provider's assets shortly before its collapse.
The number of concerns submitted to the regulator in relation to these companies significantly spiked its annual complaint figures, which had stayed relatively stable between 464 and 590 a year in the three years previously.
The figures were released by the regulator in response to an annual report published yesterday (July 18) by the Financial Regulators Complaints Commissioner, the body established by Parliament to independently review complaints against the FCA, Prudential Regulation Authority and aspects of the Bank of England.
The commissioner's report heavily criticised the FCA's register, stating the service was "difficult to understand and sometimes inaccurate".
The report highlighted concerns previously raised by the commissioner over the threat to consumer protection posed by the "woefully inaccurate" register, including a case in which the FCA was recently instructed to compensate 50 per cent of a consumer's losses after they invested in a company wrongly featured on the register.
The commissioner said: "The poor design of the register system, which the commissioner has drawn attention to in previous reports, coupled with the complexity and lack of clarity arising from the distinction between regulated firms and regulated products – a problem highlighted by the commissioner three years ago – mean that consumers sometimes believe that they have more regulatory protections than they really do ."
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