FSCS hopes to have concluded initial investigations into Drew (UK) Financial Services by end-August 2019
Although FSCS is accepting claims against Drew (UK) Financial Services, claims have not yet been passed to its claims processing teams for assessment.
The UK Financial Services Compensation Scheme has earlier today provided an update about Drew (UK) Financial Services. The latter was based in the UK and operated as an Independent Financial Adviser (IFA).
The firm was previously authorised by the Financial Services Authority (FSA). As the firm is no longer authorised, it is no longer able to provide regulated products or services. FSCS is accepting claims against this firm.
Although FSCS is accepting claims against Drew (UK) Financial Services, claims have not yet been passed to its claims processing teams for assessment. This is because the compensation scheme is still carrying out its investigations into the activities of the firm.
Firstly, FSCS will need to establish whether there are ‘protected claims’ against Drew (UK) Financial Services. For this to happen FSCS needs to know that the firm owes a civil liability to customers that would enable them to sue the firm in court. Importantly, this civil liability must be in connection with a regulated activity carried out by the firm.
At present, the FSCS’s investigations are focusing on the actions of an individual associated with the firm. Allegations of fraudulent activity have been made against this individual and relate specifically the fraudulent sale of gilt contracts. Right now FSCS is working with the police and other organisations in order understand the extent of the alleged fraud. These investigations will help the scheme reach a view on what regulatory breaches may have occurred.
FSCS hopes to have concluded its initial investigations by the end of August 2019, at which time claims will be passed to its claims processing teams for assessment.
According to FSCS’s 2018/19 Annual Report, the Scheme paid a total of £473 million in compensation to 425,760 customers of failed firms during 2018/19. This amount compares with the £405 million FSCS paid in compensation in the previous year.
FSCS’s Report also shows the body raised levies on 49,224 regulated financial services firms, with a total levy income of £517 million, to fund the costs of compensation and of running the Scheme.