Speaking at the Association of Short Term Lenders (ASTL) annual conference, Sinclair strongly criticised the regulator and said it needed to mirror the industry and accept liability for its mistakes.
“The FCA’s decision to try to run through an eight-week consultation rather than 12 weeks in order to protect itself from criticisms of its own complaints structure was a disgrace,” Sinclair said.
“That’s the only words I can use.
“We were very strong in our response that we were about to submit that they should have done a 12-week response but they’ve now extended that under pressure from the Treasury Select Committee.
“They recognise that they made a wrong decision in the first place – a regulator should not reach that point very often in their careers.”
The lack of acceptance or meaningful change to anything the regulator did in the consultation also frustrated Sinclair.
He continued: “The complaints commissioner said there were fundamental flaws and failures in handling and responding to complainants and the consultation did absolutely nothing to address anything around that. Nothing.
“The consultation was cosmetic, capping how much they would have to pay while causing distress and inconvenience and capping if they made a mistake at £10,000 per case.
“Businesses would love to get away with that rather than £355,000 which is the cap at the ombudsman service, and uncapped in court. Only this regulator could do that.”
‘The only fair way’
Fellow panellist Ray Cohen, managing director of Jackson Cohen, suggested that would inevitably mean regulated firms would end up paying more to cover compensation.
However, Sinclair argued the FCA should accept the liability themselves.
“The FCA has a bonus pot for all its staff and executives; anything they have to pay out in complaints comes out of that bonus pot – it’s the only fair way,” he continued.
“They said they implemented the senior management regime internally, but there is no liability for anything they do wrong. There has to be liability because there is for every other firm.”
The FCA executive committee has deferred any bonus payment until the report of the investigation into the circumstances surrounding the collapse of London Capital & Finance (LCF) has been issued.