Broker's complaint that FCA hindered fraud investigation is rejected

A complaint that the FCA hindered a fraud investigation by giving misleading information to police has been rejected.

Mark Mayhew, managing director of former Essex-based broker Larksway Insurance, has been in a dispute with the FCA over notifications he sent the authority of allegedly mis-sold motor policies going back two years.

He claimed it had left 1,675 policy holders uninsured and entitled to refunds.

But the complaints commissioner today confirmed that the complaint had not been upheld.

Giving his decision to Mayhew, complaints commissioner Antony Townsend said: “It is my view that the FCA has given a clear and consistent message to you that it considers the matters you have raised to be contractual issues that are not within its remit.

“Although I appreciate that you remain convinced that fraud has occurred, I have seen no evidence that the FCA has provided you with contradictory information or sought to mislead you or the City of London Police.”

Fraud allegations

In September last year, the FCA banned Larksway from serving as an insurance broker after it failed to respond to concerns over its handling of customers’ insurance premiums and ability to make payments.

Prior to this, Mayhew had sent several notifications alleging fraud to the FCA in 2016.

He initially complained to the FCA complaints team in October 2017 and was told by them that the matter raised was “a civil or commercial dispute between you and another firm/individuals.”

He complained again to the FCA in April this year that the FCA had given misleading information to police which had hindered a fraud investigation.

In March this year, police had asked the FCA whether a binding authority has to be signed by a director of a company to be valid.

The matter was referred to Lloyd’s of London, which stated:  “No requirement for binding authorities to be signed by a specific officer of the coverholder and that there is no guidance regarding the identity of the signatory in the delegated authority code. Usual contract formation rules would apply.”

In its response to a phone call by Mayhew to the FCA’s customer contact centre, he was told there were no specific rules around whether “only a person of significant control can sign terms of business with an insurer”.

He was further told this would be a “contractual agreement” outside of the FCA’s scope.

The FCA’s complaints investigator made internal checks to confirm this was “a matter of general contract law”.

The complaint was thrown out by the FCA in June this year, prompting Mayhew to turn to the complaints commissioner.