On 25 February 2016, the Complaints Commissioner, Andy Townsend, published a final decision urging the FCA to consider if firms should be required to provide a clear indication to consumers of the circumstances in which they will not be covered by the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS).

The complaint arose from the fact that firms authorised by the FCA are not required to inform consumers that the activities they carry out are not all regulated activities which fall under the FCA’s remit.  As such, in the event that something goes wrong with an unregulated product, the consumer has no recourse to compensation through FOS or FSCS, and is left only with the expensive option of going through the courts.

The Commissioner urged the FCA to assess its efficacy of its rules in light of its consumer protection objective, adding that an understanding of what is not covered is arguably of greater importance to consumers given the risks and severe consequences of something going wrong.