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FCA dishes out first senior manager ban over consumer credit failings

  • 13/10/2016
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FCA dishes out first senior manager ban over consumer credit failings
The director of a payday loan firm has become the first senior manager to be banned for failing to comply with consumer credit regulations, under the Financial Conduct Authority’s watch.

Andrew Barry Hart, sole director and controller of Wage Payment and Payday Loans (WPPL), was found to have lacked integrity and competence following an investigation by the regulator. He is no longer allowed to perform any role in regulated financial services and his applications for WPPL to be authorised to carry out regulated activities have been refused.

The firm’s interim permissions have also been cancelled because it failed to satisfy the threshold conditions regarding appropriate resources and suitability.

WPPL offered short-term high-cost loans under the trading names Payday Overdraft, Wagepayday and Doshloans.

Between 1 April 2014 and 28 August 2014 the FCA said Hart took a reckless approach to managing WPPL and to complying with regulatory requirements. He was accused of recklessly contributing to and failing to address unfair business practices carried on by WPPL. Hart did not put appropriate policies and procedures relating to creditworthiness, affordability and forbearance in place and did not have systems in place to communicate with customers ensuring that customer complaints were dealt with adequately.

His customers were treated unfairly and were frequently misled. Customer complaints were commonly disregarded, and excessive sums were taken out of some customer’s bank accounts. In some cases these practices caused financial loss to customers, many of whom were already in financial difficulties.

Mark Steward, FCA director of enforcement and market oversight, said there was no place in an FCA-regulated consumer credit market for firms like WPPL or senior managers like Hart.

He said Hart lacked the requisite integrity and competence to ensure customers were treated fairly and all relevant regulatory obligations were met.

He added: “We will continue to use our powers to protect consumers and tackle firms who cross the line and senior managers whose failures have caused or contributed to the firm’s failures.”

In making its case to reject WPPL’s applications for authorisation, the regulator cited WPPL’s failure to co-operate properly with the Financial Ombudsman Service over customer complaints. The FCA also relied upon adverse findings made against Hart in the High Court which included assertions he was not a credible witness and had provided evidence to the court which he knew to be false.

The ban follows decision notices published in July by the FCA setting out its plan to prohibit Hart and cancel WPPL’s interim permission.

The notices had been referred to the Upper Tribunal (tax and chancery chamber), but have since been withdrawn, leaving the FCA to proceed with its course of action.

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