TONY HETHERINGTON: Financial Conduct Authority is a disgrace and your £20k loss is proof

Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

B.N. writes: I looked for a safe investment for £20,000 and came across Wellesley & Co, which advertised a property bond. 

I enquired on its website and two days later received a call, apparently from Wellesley but which turned out to be from a scammer. 

He sent correspondence on the genuine company’s documentation, and I instructed my bank, Halifax, to transfer my money to the account the scammer set up in the name of Wellesley. 

You quickly found you had been defrauded. But what you also discovered is truly shocking. 

Two weeks after you made the transfer, you spoke to the real Wellesley and found you had been tricked by a clone. 

But you also found that when you made the transfer, the real Wellesley already knew about the impostor. So did your own bank, Halifax. So did Prepay Technologies Limited, the finance firm that operated the fake Wellesley account that received your money. And so did the Financial Conduct Authority.

It seemed everyone knew except you, the victim who was left to hand over £20,000 to a bunch of crooks. The genuine Wellesley told me that as soon as it realised its name was being misused, it notified the FCA.

It also told the police via Action Fraud. And it contacted the internet host GoDaddy, which took down the crooks’ website. 

The FCA put a warning on its website, but as always, this was buried among lots of other warnings and the watchdog appears to have taken no further action. 

The shocking thing is that the warning appeared six weeks before you lost your £20,000, which means that despite the regulator being alerted, the fraudsters were still in business a month and a half later. 

And despite the watchdog’s website warning, Halifax told me: ‘At the time of payment, there was no information available to us to indicate that the receiving account was being used as part of a scam.’ 

Halifax says the FCA warning was useless on its own. What it would need is details of the receiving bank account. Nevertheless, Halifax agrees counter staff did not give you any specific warnings about investment scams. It has refunded £10,000 – half your losses – plus a further £100 as it took a long time to get this far. 

Prepay Technologies told me it only became aware of the scam two months after the FCA posted its website warning – and then only because the genuine Wellesley tipped it off. 

It immediately blocked the scam account, but your £20,000 had already been withdrawn. 

What this reveals is that the regulator’s website warnings are close to useless without further action from it. Neither Halifax nor Prepay Technologies was aware of the warning. 

I asked the FCA about this. Its reply was astonishing. It expects the public to check its website regularly for warnings. But banks, finance companies, credit card issuers and so on, are not expected to pay the same attention and the watchdog says they have no duty to do so. 

Contrast this with the FCA’s own internal financial crime guide which says it is ‘poor practice’ whenever ‘a bank fails to act on actionable, credible intelligence shared at industry forums or received from other authoritative sources such as the FCA or City of London Police’. 

The fact that the watchdog now holds the public to a higher standard than the professional firms it authorises and regulates is a disgrace and a cop-out. Lose money because you failed to look at its website, and that is your fault. Lose money because your bank failed to look at that same website, and that is not the bank’s fault. 

The FCA has given consumer protection a back seat for years. Its website warnings should be the start of action, but all too often they are the end. Time for a serious shake-up of priorities – or top personnel.

 If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email [email protected]. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.