Financial Conduct Authority  

FCA apologises after botched attempt to gather data from adviser

FCA apologises after botched attempt to gather data from adviser

The Financial Conduct Authority has written a letter of apology to an adviser and offered a payment of £75 after a botched attempt to gather data.

The complaints commissioner upheld in part a complaint which alleged the FCA sent an aggressive and threatening email from its pensions transfer team, following up a data request that had been sent to an incorrect email address. 

The complainant said there had been a delayed response from the pensions transfer team until the matter became public and they were concerned they had received different treatment on the grounds of race, including nationality, based on assumptions about their surname.

The complaints commissioner, Amerdeep Somal, said there was no evidence of any racial element to the FCA's requests - and this aspect of the complaint was not upheld - but she did rule the complainant had a "reasonable right" to expect to be contacted through the correct email address.

The complainant wanted a formal apology from the FCA’s chief executive and a charitable donation made by the regulator to a charity.

The FCA said it accepted the recommendations made in this complaint and said to address them, it will be implementing changes to its processes regarding the approval and wording for informal data requests and the use of formal powers in the event of non-response. 

It said: “We will also be reflecting on the training or guidance to support business areas when they respond to enquiries from the complaints team. 

“We confirm that we have written to the complainant to apologise and we have offered an ex-gratia payment of £75.”

In July 2020 the FCA's pensions transfer team sent informal information requests to collect data from all firms with permission to advise on defined benefit pension transfers.

But two of the requests sent to the firm in question bounced because they were sent to an old email address - despite the fact the advice firm had told the FCA about its new email address in 2016.

Then in November 2020, the FCA sent a formal data request using its powers under section 165 which the advice firm received and responded to immediately - since it considered that the use of s165 was a threat by the FCA to close down the firm.

Somal said: "Although I agree with the FCA that the notice does not threaten to close down your firm, it is a formal notice from the regulator that so far as you were concerned came ‘out of the blue’.

"It refers to the FCA’s powers to enforce compliance, including regulatory sanctions such as public censure or financial penalties, and criminal sanctions for providing false or misleading information."

She said the FCA had underestimated the effect of a formal notice on those who receive one and should be more sensitive to the impact its actions had on firms it regulates.

Somal added that she recommended the FCA should add to its written apology and offer to pay the firm or a charity, the sum of £75 for the “distress and inconvenience” caused.