UK firms fined £568m by FCA during 2021

FCA actions resulted in financial firms in the UK being fined £568m over the course of 2021, the regulator has revealed.

This total was made up by fines against major banks and action against individuals for insider dealing, non-financial misconduct and carrying out regulated activities without authorisation.

The data was published by the FCA and analysed by a Parliament Street think tank, with experts concluding that the high level of financial penalties is in response to the new forms of financial crime buoyed by the COVID-19 pandemic.

Commenting on the figures, Encompass Corporation global head of industry & regulatory affairs, Henry Balani, said the pandemic has provided criminals with the opportunity to defraud, launder and perpetrate other forms of financial crime with “more efficiency than ever before”.

“Lockdown, and the resulting dependence on digital services, has made it easier for criminals to impersonate legitimate services and scam consumers,” said Balani. “On the other hand, it has caused difficulties for the financial institutions themselves to detect malicious activity, as digital identities are harder to verify than the physical or in-person alternatives that existed before the pandemic.”

However, the FCA’s figures did indicate success when it came to protecting consumers. The regulator’s contact centre prevented £4m being lost to scams, and it secured £5m to be paid back to people who invested in companies that were not authorised to undertake financial activity in 2021. A record 1,300 warnings about scams were also issued over the last year.

Furthermore, more than £1.2bn has been paid out to settle claims made by small businesses after the FCA won its Supreme Court case to clarify business interruption insurance cover.

“Unfortunately, the number of scams prevented, and fraudsters fined in 2021 is just a fraction of the total amount of financial crime successfully perpetrated,” Balani added. “Therefore, combatting it requires a concerted effort from not just the regulator, but the financial institutions, industry leaders, and banks themselves.”

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