FCA’s enforcement focus on fincrime, consumers will continue

Pensions mis-selling, financial crime systems and control failings, and mistreatment of vulnerable customers were again key themes behind fines issued by the UK Financial Conduct Authority (FCA) in 2024. Expect more enforcement activity in these areas, as well as a greater focus on wholesale markets in the months and years ahead. 

Overall, the FCA fined 27 firms and individuals a total of £176 million last year — about three times 2023ʼs total of £53 million but less than the £216 million in 2022, £568 million in 2021 and £193 million in 2020.

Redress paid to consumers far outstripped fines with four firms paying back £514,223,750 to customers.

Closing cases  

Last year, the FCA’s enforcement leadership signalled its intention to streamline its work to “drive impactful deterrence”, and moved to close some open cases without further action. As of March 31, it had closed 155 cases, 103 of which were categorised as regulatory.  Some 36 of those related to pensions advice and another 11 were categorised as financial crime cases.  

However, FCA data and statements show a variety of cases in train, including 83 related to “reducing and preventing financial crime”, 55 on the theme of “strengthening wholesale markets”, and another 35 characterised as “putting consumer needs first”.   

FCA statements reveal the regulator has a transaction reporting and market abuse controls case, an “ESG-related” case and a criminal probe into a potential investment fraud in train. Vanquis Banking Group revealed in a 2021 trading statement that it is under investigation for “conduct issues” in consumer credit.  

Financial crime  

Starling Bank, Metro Bank and CB Payments were all fined for failings in their systems and controls around preventing and detecting financial crime. Starling Bank’s and CB Payments’ fines both involved failures to implement FCA-imposed voluntary requirements (VREQ) restricting high-risk customers.  

Nationwide Building Society, Lloyds Banking Group, Barclays and one undisclosed firm were identified by the FCA as being subject to financial crime enforcement action.  

Pensions  

The fallout from 2015’s so-called pension freedoms continued to filter through into regulatory penalties in 2024. Philip Pryke, Alec John Cuthbert, Anthony Dale Cuming, Steven Harbinder Singh Sahota, Kyle Anthony Jones, and Kulvir Virk were all fined and banned from the industry for their part in advising defined benefit (DB) pension savers to transfer out of a DB scheme, or for advice related to where the transferred funds were subsequently placed.  

Recurring names 

For three of the banks fined in 2024, it was the second time they had been hit with penalties in as many years. Metro, Citigroup and TSB were all previously fined by the FCA in 2022. HSBC was also previously fined £63 million by the regulator in 2021, and Barclays was fined in both 2022 and 2021.  

Redress 

Fines for mistreating customers were accompanied by hefty redress bills. Firms paid out over £514 million in redress in 2024.

VW Financial Servicesʼ fine was £5.4 million but the accompanying redress to 110,000 customers totalled £21.5 million.  

The FCA imposed a £11 million fine on TSB Bank, but the customer redress bill for its failure to treat fairly 232,849 of its customers who were in arrears was £99.9 million. Likewise, while HSBC/Marks & Spencer Bank was fined £6.3 million for failings over customers experiencing financial difficulties, its total redress bill for the 1.5 million affected customers was £185 million.  

One of the FCA’s largest value enforcement cases of 2024 was against H2O Asset Management and did not involve a fine. The firm was publicly censured in August and instead of a fine it agreed to repay 250 million euros to investors, to forfeit management fees and investments totalling 320 million euros to the benefit of unit holders in its funds, and to apply to cancel its UK regulatory permissions.  

Rachel Wolcott contributed to this article.