FCA decides not to compensate customers of Premier FX; reiterates its apology instead
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The UK Financial Conduct Authority (FCA) announced its disagreement with the recommendation for ex-gratia compensation of Premier FX Limited’s customers. After the company suffered a collapse in 2018, the Complaints Commissioner issued a Final Report suggesting that the FCA should compensate the platform’s users for distress, inconvenience, and consequential loss.
However, the UK regulator disagrees with the notion, maintaining that an apology and payment for complaint handling delays is a more appropriate response.
The FCA elaborates on its refusal to further compensate affected users
While the FCA acknowledged the concerns that the Commissioner had raised, and it accepted many of the other recommendations, it decided against paying additional compensation. The regulator argued that the customer losses were directly caused by the actions of PFX and its director. As a result, the regulator questions the appropriateness, as well as the feasibility itself of determining compensation based on the timing and amount of deposits that were made after 2017.
So far, the FCA invested more than 12,000 hours in enforcement investigations. This led to 167 customers having their claims accepted and fully reimbursed. The FCA also admitted that it could have done a better job when it comes to regulating Premier FX. But, it also asserted that it is unclear whether the losses could have been prevented if the regulator used a different approach.
As a result, the FCA once again apologized by those who were affected by the platform’s failure, and it stressed that it is committed to learning from the incident. It allowed it to realize that a more assertive approach to authorization and supervision of payment companies is necessary, and it will personally inform complainants about the steps taken to improve its regulatory process and Register moving forward.
The FCA plans to improve its approach to regulating businesses
The FCA has provided a detailed response in which it acknowledged the distress that PFX’s collapse caused to its customers, and it even accepted responsibility for its own regulatory shortcomings. However, it also emphasized that the conducted investigation was thorough, and the same can be said for the enforcement actions that followed. All of this ensured that the affected customers were fully reimbursed.
The regulator accepted certain recommendations, and it intends to update the Register in order to be able to assist customers better moving forward. As for its authorization and supervision of PFX, the regulator has agreed to write to complainants and explain all the steps taken to improve the strength of its processes.
