FCA warning over ‘risky’ TikTok trading tips … Other videos encouraged people to invest in the crypto-currency Dogecoin. … or promoted investment schemes with promises of high returns, fixed betting or any other types of scams.

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When 45-year-old Vivian Gates went on dating website Tinder in December last year, she was drawn to Andy, a good looking 36-year-old gentleman who didn’t want a sexual partner.
‘I’m just looking for real and simple love,’ he said on his profile. Vivian was intrigued – here was someone a little different from the usual crowd of men simply on the lookout for easy sex. 
The fact that he said he was from Russia did not concern Vivian, who works for a successful manufacturing company. His profile said he lived in the UK, just 35 miles away from her. ‘He slowly sucked me in with lots of online and telephone charm,’ she says.

How con works: ‘Andy’ (left) tells Vivian he is an investment expert in messages and directs her to the cloned website (right)

Over the next two months, as they chatted on WhatsApp, Andy gained Vivian’s confidence – although of course social distancing rules meant they were never able to meet. 
So convincing was he that the self-acclaimed ‘senior investment expert’ then managed to persuade Vivian to ‘invest’ a total of £100,000 trading cryptocurrencies through what she thought was legitimate derivatives specialist IC Markets.
Money that she initially raided from her Isas and then – as demands for more money were made to meet ‘fines’ and ‘tax’ – she obtained from her dad and a loan from M&S Bank. 

Sadly, last week, after Vivian’s father contacted The Mail on Sunday asking how his daughter could withdraw her money in light of a sharp fall in the price of bitcoin, she discovered what she didn’t want to hear. 
Namely that she had all along been the victim of fraud – with her money not being used to buy bitcoin but instead funnelled overseas via cryptocurrency app Binance, probably never to be seen again.
The IC Markets website she thought she was using to trade was a clone – set up by fraudsters to look like the real IC Markets, an Australian-based company that enables investors to trade financial derivatives.
‘Why did it take so long for the penny to drop?’ Vivian asks herself. ‘I was convinced that what Andy was encouraging me to do was a good way to make money. Now, I face financial destitution.’

Scams like the one Vivian was caught out by are on the increase

Scams like the one Vivian was caught out by are on the increase. Last month, the Financial Conduct Authority said that consumers lost £78million to ‘clone firm’ investment scams in 2020.
It also said that the pandemic had made investors more susceptible to such scams.
Temptation is certainly what drew Vivian into the fraud committed against her. Living with her parents, she had long been keen to buy a home of her own and had opened a Help to Buy Isa – no longer available – to fulfil her dream. But when she started speaking to Andy, she thought her dream could be met much earlier.
Within days of connecting on Tinder, Andy began talking about how easy it was to make money from trading cryptocurrencies such as bitcoin.
‘I don’t really know much about bitcoin,’ texted Vivian. ‘I can be your teacher,’ he replied. ‘I am a senior investment expert.’

Five key steps to help avoid being conned

1. Avoid all unsolicited investments – whether they are made online, via social media (such as a dating website) or on the telephone.
2. Always check details of any financial company you are dealing with. Visit register.fca.org.uk. Also check the regulator’s warning list of companies to avoid at: fca.org.uk/scamsmart.
3. Only use a company’s telephone number and email address given on the regulator’s register.
4. Pension Wise has useful information on how to avoid scams available at: pensionwise.gov.uk/en/scams.
5. If in doubt, ring the FCA consumer helpline on 0800 111 6768.

Vivian took the bait. To begin with, she invested £300 through the trading platform recommended by Andy. Then, as her trades seemed to make profits, she invested more. ‘I invested £5,000, then £8,000 and another £4,000,’ says Vivian. ‘Most of the money came from my Isas.’
Andy helped her trade by sending her screen shots of what to do. But things soon started to unravel. The trading platform she thought she was using – IC Markets – started to send her a mix of threats and financial demands via texts using the IC Markets logo. It said she had ‘personal tax’ to pay on the value of her money held on the platform – $30,091 (£22,110). She paid it by taking out a loan with M&S Bank.
It accused her of ‘illegal operations’ and demanded she pay a fine. It froze her account and said it would send someone to the UK to investigate, but not until August this year – and only if the coronavirus epidemic had abated.
When Vivian asked if she could withdraw her money, she was told she would first have to make a $25,000 deposit.

‘Andy’ told Vivian about how easy it was to make money from trading cryptocurrencies

The trading platform she was using was not IC Markets – but a clone: icmarketsex.com/wap instead of icmarkets.eu/eu/en. Last week, the official IC Markets told The Mail on Sunday that it had reported the clone website to the ‘relevant authorities’.
The clone, registered just a couple of months ago – with fees paid for just one year – also suddenly disappeared.
Tony Hetherington, consumer champion of The Mail on Sunday, has spent his entire career chasing down scammers. He describes the cloned website as ‘amateurish’.
He adds: ‘It gives a US phone number that until recently belonged to a different company called Mailiexchange which also claimed to be in the cryptocurrency business.
‘The suspect website uses a gmail email address – when did you ever see a genuine company with its own website not use its own domain name for emails?
‘Finally, parts of the website are duplicated elsewhere – for example, the claim that ‘it has subsidiaries or cooperative companies in Europe, America, and Asia Pacific – more than 3,300 employees’ appear on other digital asset websites.’ 
What The Mail on Sunday has been unable to establish is whether Andy was acting as a broker for the scammers, earning a commission every time he ensnared another ‘Vivian’ – or whether he was a principal in the fraud.

Hetherington says: ‘It’s extremely unlikely he was working alone. I can’t recall seeing any clone scam that involved just one person. Setting up a clone website, phone lines, and bank accounts, along with fake statements for investors, would be a big stretch for any one person.’ 
Some financial experts believe the Government should be doing more to protect the likes of Vivian.
On Friday, Debbie Barton, financial crime prevention expert at wealth manager Quilter, told the MoS: ‘Currently, the burden lies solely on individuals to protect themselves, so the Government should act by changing the law to prevent search engines and social media platforms from hosting scam adverts on their sites – and to force these online platforms to act quickly by removing suspected scams as soon as they are notified.’
Of course, all this is of no joy to Vivian. Although she has contacted Action Fraud, Tinder and the FCA, she accepts she is unlikely to see her money again. As for Andy, he was encouraging Vivian to invest more money until nine days ago. 
Last Monday, after Vivian confronted him, his response contained expletives, followed by: ‘I shouldn’t have helped you.’ 
At no stage did Andy send her any additional pictures of himself, suggesting that his Tinder picture might also have been cloned. And the earlier messages between them – which she screen-grabbed – are no longer on the site.
The name of the victim has been changed to protect her identity.

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Law360, London (February 3, 2021, 12:25 PM GMT) — The Financial Conduct Authority has secured a restitution order of just over £676,000 ($922,000) against five of seven defendants accused of illegally taking deposits for financial projects.The City watchdog said on Wednesday that it took the action after the defendants — two businesses and five men — accepted money for projects, including foreign exchange trading and crypto-assets, without FCA authorization.High Court Judge Kelyn Bacon ordered that an investment company, Bright Management Solution Ltd., and three men — Mohammed Hussain, Mohammed Kahhar and Kayes Miah — were jointly and severally liable for repaying money to members of the public who invested.

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On Tuesday 12 January we updated our consumer warning against an unauthorised online trader using Instagram, known as chloefxtrades / chloehenx, to include a further account xchloesworld.
This account has been promoted widely on social media and we want consumers to be aware that it is not authorised by us. We have requested that the account should be removed.
Consumers should be wary of adverts online and on social media promising high returns from investing online. Consumers should always do further research on the product they are considering and the firm they are considering investing with. 
What consumers can do
Consumers should check the Financial Services register to see if a firm is authorised. If they use an unauthorised firm, they won’t have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS), so are unlikely to get their money back if things go wrong.
Consumers can also check the list of unauthorised firms and individuals we’ve received complaints about. If the firm isn’t on our list, don’t assume it’s legitimate – it may not have been reported to us yet.
Read more about forex scams.
Online trading scams
UK consumers are being increasingly targeted by investment scams carried out via online trading platforms where fraudsters offer trades in foreign exchange, contracts for difference and cryptoassets such as bitcoin. These are often promoted via social media.
Fraudsters typically promise high returns and use fake images of luxury items to entice people to invest in their scams. The ads then link to professional-looking websites where consumers are persuaded to invest, either through a managed account where the firm makes trades on their behalf, or by trading themselves using the firm’s platform. They may also ask for consumers to message them privately to hear about the investment opportunity and invest that way.
Most consumers report initially receiving some returns from the firm to give the impression that their trading has been a success. They will then be encouraged to invest more money or introduce a friend or family member to invest. However, eventually the returns stop, the customer’s account is suspended and there’s no further contact with the firm. 
Many scam firms claim to be based in the UK and even claim to be FCA authorised. Consumers should always check the FCA register to see if a firm is authorised.
The FCA cannot compel social media companies or search engines to remove scam content. However, we encourage consumers to report content to us and to social media companies or search engines directly. This allows us to issue warnings and to request that content is removed.
Consumers can report firms or scams to us by contacting our Consumer Helpline on 0800 111 6768 or using our reporting form.

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In September 2020, we published guidance on branch closures and ATM closures and conversions. The guidance supports our consumer protection objective and is designed to protect consumers by setting expectation that firms should assess customer (consumer and SME or micro-enterprise) needs and consider the availability and provision of alternative arrangements where closures or conversions are planned.
Our Principles for Businesses require firms to treat their customers fairly, and communicate with them in a fair, clear and not misleading way. We expect firms to exercise particular care with vulnerable customers.
In January 2021, the Government and devolved authorities announced new restrictions across the UK due to coronavirus (Covid-19). Some banks and building societies have informed us that they are either going ahead with branch closures already announced, or announcing new branch closures during the current lockdown. 
We are concerned that these activities could have significant consequences for customers. It may be harder than usual to reach all customers under the current restrictions and engage with them on closure proposals effectively (for example, small businesses that are temporarily closed). Some customers may need to access in-branch services to help them prepare for closures but may be unable to do so. Customers may also need additional help to access online banking and making payments. We want firms to review their plans against our existing guidance and ensure that they continue to comply with our Principles.
What we’re asking of firms 
In line with our guidance firms should consider the impact of branch closures on customers. Where they are unable to meet the expectations of our guidance during lockdown measures, they should consider pausing or delaying new branch closures where possible, particularly where this could have significant impact on vulnerable customers. This would be similar to the approach firms took during lockdown measures in 2020.
Where firms consider it is appropriate to continue with plans during this period, we expect them to have considered our guidance and be able to demonstrate how they’ve taken the concerns and expectations set out in this statement into account. If firms are considering new closures or advancing those previously announced during this period, we expect them to:
communicate with customers in a way that is clear, fair and not misleading to inform them of the closure proposals. Particular consideration should be given to the best way to make sure vulnerable and hard-to-reach customers are aware of the proposals and are able to contact the firm. 
give customers clear information about how the firm can help them access alternatives during this period of national restrictions, for example support to use online banking.
where appropriate, engage with customers to understand their needs and properly consider how they will be affected by the proposals.

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FCA confirms update to guidance on mortgages and consumer credit repossessions
In November 2020, we published guidance which meant firms should generally not enforce repossessions before 31 January 2021. On 13 January, we published updated draft guidance for comment. Following the period for comment, we are today publishing finalised guidance, which follows the overall approach of the draft guidance.
For mortgages, we are extending the guidance so that firms should not enforce repossessions, except in exceptional circumstances, before 1 April 2021. 
For consumer credit, we have updated the guidance so that firms will be able to repossess goods and vehicles from 31 January 2021. The final guidance emphasises that this should only be as a last resort, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding. Importantly, firms will also need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate.
Our approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home at this time. 
Support available for consumers
Support continues to be available if you’re experiencing financial difficulties because of coronavirus. This could mean taking a payment holiday or receiving tailored support.
You have until 31 March 2021 to apply for a payment holiday for:
mortgages, personal loans, credit cards, store cards and catalogue credit, motor finance, including hire-purchase and leasing agreements, rent-to-own, buy now pay later, pawnbroking agreements and high-cost short-term credit.
This is time agreed with your lender when you make no or reduced payments. You can request a payment holiday of up to 6 months in total, but lenders can only agree a payment holiday of up to 3 months at a time. For high-cost short-term credit, you can apply for a 1 month payment holiday. If you apply by 31 March, you may be able to extend up to 31 July when all payment holidays will come to an end.
If you’ve taken a payment holiday your lender will be in touch before it ends to see if you need more help. If you can afford to restart repayments you should, as it will cost less in the long term.
If you are coming to the end of your payment holiday, and you are still experiencing difficulties in keeping up with your repayments, your lender should provide tailored support. This is support appropriate to your individual circumstances.  
Keeping pace with contactless payments
Since the limit for contactless card payments was raised to £45 last April at the start of the pandemic, people are increasingly making use of contactless payments. It’s important that payments regulation keeps pace with consumer and merchant expectations. Recognising changing behaviour in how people pay, as part of a wider consultation, we will shortly be seeking views on amending our rules to allow for a possible increase in the contactless limit to £100.
Support for frontline staff
Banks, building societies, credit unions and Post Offices are working hard to continue to provide their services during the current period of national restrictions due to coronavirus (Covid-19). At this time, we encourage customers, wherever possible, to use online services for their banking.
We are aware of reports of an increase in verbal and physical attacks on branch staff by customers who have been told to wear a face covering or asked to wait in a queue to help maintain social distancing. This is a matter of concern for the FCA and we wish to thank the frontline staff for their significant efforts to keep branches open during this challenging period.
We would remind customers that, by law, it is mandatory to wear a face covering in a branch, unless you have an exemption. For more information on this please refer to the government guidance for England, Wales, Scotland, and Northern Ireland.
Branch staff are carrying out a critical public-facing service and must be treated with respect. Staff should not be physically or verbally attacked in any situation, including where a customer has been asked to wear a face covering.
We support firms that adopt a zero-tolerance approach to staff abuse and any necessary follow-up actions to enforce this. 
We recognise that coronavirus has made many people anxious about their finances. We are working closely with firms to make sure customers can access the financial services and help they need during the pandemic. For more information on the FCA’s temporary measures to support consumers, please see our coronavirus page.

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The FCA is issuing a warning to the public as reports of ‘clone firm’ investment scams increased by 29% in April 2020 compared to March, when the UK went into its first lockdown. Action Fraud data reveals consumers reported losses of more than £78 million between January-December 2020. Throughout 2020, consumers reported average losses of £45,242 each on average when investing with fraudsters imitating genuine investment firms. The data has been released as part of the FCA’s ScamSmart campaign, alongside advice to help investors avoid fake firms and protect their hard-earned cash.
The ongoing financial impact of coronavirus (Covid-19) may also make people more susceptible to these types of clone scams. 42% of investors say they are currently worried about their finances because of the pandemic, and over three quarters (77%) have or plan to make an investment within the next 6 months to help improve their financial situation.
However, the FCA highlights even the most experienced investor could be at risk. Three quarters (75%) of investors said they felt confident they could spot a scam. However, 77% admitted they did not know, or were unsure what a ‘clone investment firm’ was.
Clone firms are fake firms set up by scammers using the name, address and ‘Firm Reference Number’ (FRN) of real companies authorised by the FCA. Once set up, these fraudsters will then send sales materials linking to websites of legitimate firms to dupe potential investors into thinking they are the real firm when they are not.
The FCA is advising anyone considering an investment opportunity to check the Warning List of firms, which is updated daily, and not to deal with a firm that is not authorised by the FCA. The specific details of a firm, such as the telephone number and website address can be verified on the FCA Register. The FCA also warns consumers to use the phone number on the FCA Register to make contact with an FCA authorised firm so as to be sure they are dealing with the real firm.
Even though 2 in 5 (38%) investors said they would check the company’s Firm Reference Number (FRN), checking this alone isn’t enough. Scammers will often copy FRN numbers and encourage victims to check the FCA Register to prove their legitimacy.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, said: ‘Clone investment scams can look real and sophisticated but anyone can spot them by following our advice.
‘Fraudsters use literature and websites that mirror those of legitimate firms, as well as encouraging investors to check the Firm Reference Number (FRN) on the FCA Register to sound as convincing as possible. Last year we issued alerts in relation to over 1,100 firms including clones, which has more than doubled since 2019 and we are working with the National Economic Crime Centre (NECC) and National Cyber Security Centre to take down clone sites when they are discovered.
‘If you’re considering an investment, visit the FCA Register to make sure the firm you’re dealing with is authorised. Check our Warning List of firms you should avoid, use the contact details on our FCA Register, not the details the firm gives you, and check for subtle differences to avoid ‘clone firm’ scams. And if you’re still unsure, call our consumer helpline for further information. When it comes to clones, I cannot emphasise enough how important it is to double check every detail.’
Janet from Chester, who lost £40,000 to a clone investment firm said: ‘I’m quite savvy minded when it comes to money – being a finance officer I thought I was a confident investor and thought I knew how to spot the warning signs of a scam. After searching the internet for high-return bonds, I received a call the next day about investing in student accommodation.
‘I found legitimate details of the company online – everything seemed genuine, so I invested. A few months later, after a couple more investments, I started to get a bit worried – I still hadn’t received confirmation of the latest investment. I tried to call the contacts I had been speaking to, but the numbers were invalid. It was clear I had been scammed. I had lost £40,000. I really thought I’d be able to spot a scam, but now I know they can be far more sophisticated than I had ever imagined.’
Consumer champion and presenter of Watchdog, Matt Allwright, said: ‘It may seem appealing – particularly right now – to make some investments to boost your savings or income. However, it is more important than ever to tune into the finer print, spot the beartraps and triple check details before parting with your money.
‘A clone firm scam can target anyone, they are usually smart fraudsters who often present opportunities which look very tempting indeed. When considering your next investment, make sure you only ever use the details listed on the FCA Register, and think about getting impartial advice before going ahead.’
Graeme Biggar, Director General of the National Economic Crime Centre said: ‘The National Economic Crime Centre (NECC) and partners including the City of London Police, Serious Fraud Office and Financial Conduct Authority are working with the National Cyber Security Centre (NCSC) to tackle the fraudulent and cloned websites behind investment fraud schemes. Consumers should be wary of investment websites that may appear genuine and I would ask anyone who is thinking of investing their money to check the contact details on FCA’s Financial Services Register first, or contact the FCA’s consumer helpline for advice.  In one specific initiative targeting FCA-identified fake firms and cloned websites, we worked with the NCSC to remove over 90 cloned websites, plus 134 UK scam phone lines and 105 associated email addresses. 
‘Alongside our partners, the NECC is building an intelligence picture of organised criminals who are using cloned websites and fake comparison sites to carry out investment fraud. We will use every tool at our disposal to track down, disrupt and prosecute those responsible for this criminal activity.’
How to protect yourself from clone investment firms
Reject unsolicited investment offers whether made online, on social media or over the phone. Be wary even if you initiated contact.
Always check the FCA Register to make sure you’re dealing with an authorised firm and check the FCA Warning List of firms to avoid.
Only use the telephone number and email address on the FCA Register, not the contact details the firm gives you and look out for subtle differences.
Consider seeking impartial advice before investing.
Investors can test if they can spot an investment scam from a smart investment by taking the Scam or Smart quiz, visit fca.org.uk/scamsmart to find out more.
Notes to editors
29% and £78 million figures used in second paragraph are from Action Fraud data relating to cloned company fraud identified amongst investment and pensions fraud reports submitted between January-December 2020.
42% and 77% figures used in third paragraph are from Censuswide. 1,003 UK respondents who invest (actively invest in stocks, shares, bonds or other investment products) aged 50+. Fieldwork was undertaken between 31/12/2020 – 05/01/2021. The survey was carried out online. 
75% and 77% figures used in fourth paragraph, and 33% figure used in sixth paragraph are from Censuswide. 1,003 UK respondents who invest (actively invest in stocks, shares, bonds or other investment products) aged 50+. Fieldwork was undertaken between 17/02/2020-19/02/2020. The survey was carried out online.

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Public policy interventions made in 2020 provided more time for the work necessary to ensure that published financial information continues to be of the quality that preparers and users of financial information expect.
Along with these measures, the FCA, Financial Reporting Council (FRC) and Prudential Regulation Authority (PRA) made a joint statement that encouraged investors, lenders and other users of financial statements to take into account the unique set of circumstances arising from the coronavirus pandemic. The need to take the circumstances arising from the coronavirus pandemic into account remains relevant today.
The measures in place
The FCA and FRC would like to remind companies of the measures that remain valid today and which provide some flexibility. This includes allowing listed companies an additional two months to publish their audited annual financial reports. This is because we recognise that we are now in the busiest period of the year for preparing, auditing and publishing financial information. This has coincided with further restrictions imposed through the recent national lockdowns in the UK.  
Recognising the heightened challenges and in line with our previous statements, the FCA and FRC would like to encourage all stakeholders including in particular boards of listed companies to (1) re-familiarise themselves with the measures and (2) use them in light of any resourcing constraints in finance and/or audit teams to ensure the quality of reporting is not compromised during this period.
Alerting investors to reporting timetables
We also alert investors and other users of financial information, including lenders assessing covenant breaches arising solely because of changes in reporting timetables, that reporting timetables for companies might be extended for these reasons and to view these changes in the context of current events.  
Keeping the market up to date
During this period, it is as important as ever that the market is kept up to date with information. The Market Abuse Regulation (MAR) remains in force and companies are still required to fulfil their obligations concerning inside information as soon as possible unless they have a valid reason to delay disclosure under the regulation. Companies must continue to assess carefully what information constitutes inside information at this time, recognising that the global pandemic and policy responses to it may alter the nature of information that is material to a business’s prospects. 
Coronavirus-related reporting and audit guidance
The FRC has issued a series of guidance to support high-quality reporting and disclosure of the circumstances companies have faced as a result of the pandemic, and the mitigating actions they have taken to address risks. Further guidance was also included in the FRC’s year-end letter to CEOs, CFOs and Audit Committee Chairs. 
Given the heightened risk, challenge and uncertainty, audit committees may consider it appropriate to set out in their annual report the work they have undertaken, and the measures they have agreed to ensure high-quality reporting and audit for the period affected. This might include how they have ensured they have allowed enough flexibility in the year-end timetable to complete all the necessary work to an appropriate standard that will meet investor and stakeholder expectations. 
Auditors’ duty to report
The FCA and FRC remind audit firms of their regulatory obligations to report, to the appropriate regulator, matters arising from their work on a timely basis.
Please refer to the FCA’s Dear CEO letter published in August 2020, and the FRC’s ISA (UK) 250 Section B – The auditor’s statutory right and duty to report to regulators of public interest entities and regulators of other entities in the financial sector.

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Speaker: Georgina Philippou, Senior Adviser to the FCA on the Public Sector Equality DutyEvent: The Ethnic Diversity in the City and Corporate UK SummitDelivered: 21 January 2021Note: this is the speech as drafted and may differ from the delivered versionHighlights
Financial services generally are not diverse and that is not a good thing for anyone. But it is also important to remember that diversity is one thing and inclusion is another; without an inclusive culture, the value of diversity, when achieved, will not be realised.
As the FCA, we want to see a healthy financial services industry; we want to mainstream diversity and inclusion into all of our regulatory processes.
The responsibility for creating and maintaining more ethnically diverse and inclusive cultures in the financial service industry sits with us all.
I am here today to talk to you about why the FCA cares about diversity and inclusion, and I suppose the question really should be why on earth wouldn’t we? So the question perhaps isn’t so much why we care but how we care.
Let me count the ways.
We care as an employer, as a regulator and as a public body.
I suspect that we are preaching to the converted today and everyone here accepts that we would all benefit from a more diverse and inclusive financial services industry. Perhaps we would also accept that the FCA has an important responsibility both to lead by example, and to use our regulatory powers, hard and soft, to advance the agenda.
As an employer, we want to be as diverse and inclusive as possible, reflecting the communities in which we are placed and the consumers whom we protect.
As a regulator, we want to move the dial on diversity and inclusion in the financial services sector.
We all know that diversity has many benefits. People with different life experiences can bring new thinking and their experiences can inspire new approaches to problem solving and decision making
As a public body, we are subject to the requirements of the Public Sector Equality Duty, which means we must look for ways to eliminate discrimination, advance equality of opportunity and foster good relations between people who share protected characteristics and those who do not.
At the last census, the most ethnically diverse region in England and Wales was London, where just over 40% of residents identified as BAME. In fact, Newham, where the FCA’s London office is located, was the local authority where people from the White ethnic group made up the lowest percentage of the population, at 29%. I highlight London because that is, for now at least, where most financial services firms are based, and because we are talking about the City today.
We all know that diversity has many benefits. People with different life experiences can bring new thinking and their experiences can inspire new approaches to problem solving and decision making. This can help firms to understand and meet the needs of all consumers, including those from diverse sections of society, ensuring that parts of the population are not unnecessarily or unfairly excluded from the advantages of positive engagement with financial services.
The McKinsey ‘Diversity Wins’ Report, published in May 2020, notes that ‘the business case for diversity and inclusion is stronger than ever’.
McKinsey found that the most ethnically diverse companies are 35% more likely to outperform the least diverse.
And in the 2017 McGregor-Smith Review, the potential benefit to the UK economy from full representation of BME individuals across the labour market, is estimated to be £24 billion a year.
In their 2019 annual report, Leadership 10,000, Green Park found that only 1.6% of the Top 100 roles in Finance & Banking FTSE 100 companies were held by Black colleagues.
In their 2018 report, Paying attention, the research firm Randstad revealed that members of the BAME community currently hold fewer than 1 in 10 management jobs in UK financial services.
Remember that census figure – 40% of the London population is BAME – and pause to think.
Now, business cases are all too easy for clever people to unpick, what is more difficult to unpick is the fact that the city and financial services generally are not diverse and inclusive and that cannot be a good thing for anyone. You might dismiss a business case but you cannot dismiss a moral imperative to do the right thing.
As an employer
As an employer, we have worked hard in recent years to make sure the FCA is more ethnically representative of the society we serve and that everyone has fair opportunities to work, develop and progress. We recognise that diversity is one thing and inclusion is another.
The stats show that 30% of our associate colleagues are BAME so that might not look too bad.
But do those colleagues thrive and prosper and get good opportunities to show what they are capable of and do they progress through the organisation?
The stats show that only 10% of our senior leadership team are BAME and I am sure we are not alone in that discrepancy between junior and senior levels.
Things are changing but not at the pace we would like.
Two things have happened in the last year to give us all a bit of a kick.
1. The first is the pandemic
Which, as we all know, is affecting different parts of society in different ways, and we  need to recognise and address that. An example of the work we are doing – we are using our Financial Lives Survey data and our Covid-19 October panel survey data to analyse and share what we know about product usage and the impact of the pandemic on different groups of consumers with protected characteristics, with a focus on BAME adults, disability and gender.
2. The second is recent events surrounding the Black Lives Matter movement
We want to make sure we are taking bolder action and making firmer commitments to change as an organisation
Which have highlighted the impact of systemic racism and discrimination in society, and emphasised the challenges we face as an organisation, and as an industry, in relation to ethnicity and race. These events have elevated the voices of our people, they have paved the way for uncomfortable conversations, and they have helped to bring home that what is bad for ethnic diversity is bad for us all. It is incumbent on all of us to reflect on our own behaviours and commit to change.
Through the publication of our Ethnicity Action Plan, we seek to be transparent about the challenges we face, we want to make sure we are taking bolder action and making firmer commitments to change as an organisation. We hope that by doing this, while recognising that we are not perfect, we can set an example for the firms that we regulate and encourage conversation and action.
A big part of this is about using our data to better understand the challenges we face, and being transparent with that data, so that we can hold ourselves to account and monitor own our progress or lack of it.
In 2019, despite no mandatory requirement to do so, we published details of our ethnicity pay gap. But we recognised that the grouping of Black, Asian and Minority Ethnic (BAME) people masks some important underlying differences between ethnicities, and so this year, we published a breakdown of our ethnicity pay gap as well as our intersectional ethnicity-gender pay gap.
And we are continuing to look at where else we can break down data to build a richer picture of our people, because we cannot think about ethnic diversity without considering its intersectionality with other protected characteristics.   
Our (mean) ethnicity pay gap is 27%. While this is not an equal pay for equal work issue it is not something we are proud of because it reflects some fundamental structural imbalances in our organisation, with too many BAME colleagues in junior roles or at the junior end of roles.  Again, I am sharing this with you in the hope that it will encourage you to be as open as possible in our subsequent conversations.
We are also transparent about our targets and why they matter. Our biggest challenge remains addressing the representation of women and BAME people at senior levels. We have hit our BAME representation interim target of 8% ahead of time, but we have missed our gender representation interim target of 45%. These targets are so important, because they allow us to own and be open about our uncomfortable truths, and drive accountability for change.
As a regulator
Looking beyond our own four walls at our role as a regulator now.
The Banking Standards Board asks respondents about their ethnicity as part of their annual survey of culture in banking; their findings suggest that:
Black and Asian respondents are less likely to feel comfortable challenging their manager and;
are more likely to say they find it difficult to progress in their organisation without flexing their ethical standards.
Safe cultures play a key role in supporting inclusion, encouraging employees to bring their ‘whole selves’ to work. Without an inclusive culture, the value of diversity will not be realised. Without inclusion, diversity will not lead to better decision making. Without inclusion, we will not be able to meet the needs of all consumers.
When employees do speak out, the response of an organisation is key to determining whether they or their colleagues will feel safe to do so again
We want to see a healthy financial services industry with cultures that reduce the potential for harm. How a firm prioritises and embeds diversity and inclusion are clear indicators of its culture. And each firm’s culture is different. There is no one size fits all model and we cannot prescribe what any firm’s culture should be, but it is the responsibility of us all, of everyone in the financial services industry, to create and maintain cultures which embody diversity and inclusion.
It is easy to become overwhelmed by ‘culture’, it seems far too nebulous a concept to get your arms around. So, it helps to break it down into more manageable components.

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The Financial Conduct Authority (FCA) has published proposals to introduce a price cap on the fees claims management companies (CMCs) charge their customers in relation to claims for financial products and services.
Some consumers currently pay fees of more than 40% of the redress they receive. The proposed cap restricts this, and will mean CMCs won’t be able to charge more than 15-30% depending on how much redress a consumer is due. This will see some consumers saving several thousand pounds on the fees they pay to CMCs.
The cap will apply to all claims where a consumer is awarded monetary redress, apart from PPI claims which are already subject to a cap set by Parliament.
As part of the proposals, CMCs will be required to disclose key information, such as giving consumers more information about how the fees they pay will be calculated and better signposting to the free alternative routes to redress available.
This information must be disclosed to consumers before they enter into a contract, to help consumers make better-informed decisions about using CMC services.
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:
‘We took over regulation of CMCs in April 2019, and have since been proactively supervising the sector. When working well, CMCs can provide useful services for consumers. However, consumers can experience harm when they do not understand the nature of the service CMCs provide and where they are charged excessive fees. The proposals we have announced today are designed to address this.
‘We estimate that the proposed cap on fees could save consumers around £9.6m a year.’
Apart from PPI, the vast majority of financial services and products claims currently being managed by CMCs relate to four particular financial services or products: packaged bank accounts, loans, savings and investments, and pensions.
There is currently a PPI price cap for CMCs, which is 20% of the redress paid to the consumer. Due to the period of change the PPI market is undergoing the FCA is not proposing to change it at this time. Therefore, claims that relate to PPI will remain capped at 20% and will be unaffected by these proposals.
The consultation is open until 21 April 2021. A policy statement is expected to be published in Autumn 2021. If a fee cap is confirmed the FCA will monitor its effects on the CMC market and its consumers.
Notes to editors
Proposed price cap bands
Redressband 
Consumer redress obtained 
Max % rate of charge
Max total fee
 
 
Lower (£)
Upper (£)
 
 
1
£1
£1,499
30%
£420
2
£1, 500
£9,999
28%
£2,500
3
£10,000
£24,999
25%
£5,000
4
£25,000
£49,999
20%
£7,500
5
£50,000
NA
15%
£10,000

Case study: Mrs and Mr M’s investment
o    Mrs and Mr M used a CMC to claim redress for a mis-sold investment. They signed an agreement to pay 48% (including VAT) of any redress they were awarded under the claim.o    Having found that it mis-sold the investment to Mrs and Mr M, their bank awarded them redress of £56,447 to put them back in the position they would have been in had they not been mis-sold the investment. o    Under the current rules, Mr and Mrs M had to pay £27k in fees, however under the proposed rules they would have paid just over 10k, saving them around 17k.
The Financial Guidance and Claims Act, which brought CMCs in to the FCA’s perimeter, also placed a specific statutory duty on the FCA to make rules with a view to securing an appropriate degree of consumer protection from excessive charges by financial services CMCs. The proposals in this consultation paper set out how we intend to meet that duty. 
The proposals in this consultation do not apply to claims management activity outside of the Financial services sector.
The proposals in this consultation paper are part of our wider regulation of the market. Since taking on the regulation of CMCs in April 2019, the FCA has introduced rules focused on protecting consumers from harm. The FCA has already published a portfolio strategy letter (October 2020), two ‘Dear CEO’ letters reminding CMCs of its expectations around financial promotions and acting for their customers (June 2019) and the importance of carrying out due diligence to ensure the validity of claims (October 2019). There was also a joint statement issued with the Information Commissioner’s Office and the Financial Services Compensation Scheme (FSCS), reminding firms and Insolvency Practitioners of their responsibilities when handling personal data and directing consumers to FSCS (February 2020).

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