How the FCA acts against firms: fines, bans and compensation orders

The Financial Conduct Authority (FCA) is the UK's financial services conduct regulator¹. When a firm breaks its rules, the FCA has a range of tools: it can fine the firm, restrict what it is allowed to do, require an independent review of its business, open an enforcement investigation, publicly censure it, or take it to court. In the largest mis-selling cases, its fines have run to hundreds of millions of pounds: the National Audit Office records that the FCA's interventions have included mis-selling fines totalling £298 million².

What the FCA generally cannot do is settle your individual complaint or pay you compensation directly. Money back for a single customer usually comes through one of three routes: the firm itself putting things right, the Financial Ombudsman Service ordering it to, or a consumer redress scheme the FCA sets up for a whole group of affected customers. This page explains each of those routes, what the FCA's enforcement powers actually achieve, and where to go when you are the one who has lost out.

What the FCA can do when a firm breaks the rules

The FCA's enforcement toolkit runs from quiet supervision to public punishment. At the supervisory end, it can restrict a firm's trading abilities and require independent reviews of its business. A crackdown on firms misusing UK authorisation to promote contracts for difference (CFDs) abroad saw 24 firms closing, with actions including restricting their trading abilities, requiring independent reviews of their business and opening enforcement investigations, 2 of which were opened as investigations⁷. At the punitive end sit fines, public censures and bans on individuals working in financial services.

The FCA is also a designated public enforcer under Part 3 of the Digital Markets, Competition and Consumers Act, which lets it seek court orders that may include redress for breaches of consumer protection legislation, including the Consumer Rights Act³. Under section 137S of the Financial Services and Markets Act 2000, it is able to intervene in respect of breaches of its rules⁸. And where an unfair contract term also amounts to a rule breach causing loss to consumers, it can apply to court for restitution or require a firm to make restitution³.

Enforcement is not the only response to a problem the FCA finds. When it ran its credit card market study, its listed options ranged from taking no further action, to making new rules, to using firm-specific enforcement powers, to publishing handbook guidance⁹. When the Supreme Court's Plevin ruling changed what counts as unfair commission disclosure, the FCA brought in new rules and guidance in August 2017 for businesses handling PPI complaints rather than pursuing each firm individually¹⁰. The choice between rule-making and enforcement depends on whether the problem is one firm's misconduct or a market-wide weakness.

The FCA cannot settle your individual complaint

This is the point most people get wrong. The FCA polices firms; it does not act as a judge between a firm and one customer. Its own guidance on claims management companies states it plainly:

The same principle applies across financial services. The FCA also does not have the power to grant redress to consumers who have suffered loss simply because a contract term or notice is unfair or insufficiently transparent; it can only act where the unfair term also breaches its rules, in which case restitution may follow³. For an individual dispute, the bodies that can actually order money to be paid are the Financial Ombudsman Service, which can decide on an appropriate remedy including a money award up to a limit set by the FCA¹², and the courts.

There are edge cases worth knowing. Where the firm a complaint is about is not on the FCA Register, the ombudsman directs such complaints to the Pensions Ombudsman instead⁴. And where a firm has failed, the Financial Services Compensation Scheme (FSCS) may compensate eligible customers, which is a different route again. The FCA's role in an individual problem is usually upstream: its rules, its investigations and, where harm is widespread, the redress schemes described next.

Consumer redress schemes: compensation for groups of customers

When a problem affects thousands of customers across a firm or an industry, complaining one by one is slow and uneven. The FCA's answer is the consumer redress scheme. Under section 404 of the Financial Services and Markets Act, it can make rules requiring authorised persons, electronic money issuers and payment service providers to establish and operate a scheme³. It can also impose a requirement on an individual firm to run a scheme of its own under section 404F(7)³. The FCA describes its redress toolkit as including rules and guidance on complaints, statutory powers against individual firms, industry-wide redress schemes and voluntary schemes¹³.

The clearest live example is motor finance. The FCA has launched a redress scheme for borrowers¹⁴, to compensate eligible car finance customers who may have been treated unfairly over commission arrangements¹⁵. Under the scheme, lenders review their past cases using a method the FCA has set out, and it has produced a calculator for financial businesses to work out whether customers are owed redress¹⁶. If you are unhappy with, or wish to query, your lender's response, you go back to them and ask for a "redress determination"¹⁷.

How a redress scheme works its way from the FCA to an individual customer's pocket

A redress scheme does not remove your ordinary complaint rights. The ombudsman has confirmed that complaints brought to it before 30 March 2026 are not affected by the FCA's motor finance redress scheme, and it will investigate those and give an answer in due course¹⁷. The government's review of the ombudsman has also proposed changes to how such schemes and the ombudsman interact, including giving the FCA the ability to intervene quickly to ensure an orderly and consistent approach to handling widespread issues with minimal disruption for consumers and firms¹⁸.

Civil action to stop unauthorised activity and recover money

Some of the FCA's most visible work is against firms operating outside the rules altogether. Operating a financial services business without FCA authorisation is against the law¹⁹. Where the FCA finds it happening, it can go to the High Court to stop the activity and get money back for victims. In September 2026 it began proceedings against a firm trading as Hunter Jones, asking the court to stop it carrying out regulated activity and to require money to be returned to investors²⁰. In an earlier case, the FCA took civil action to stop the activity and obtain compensation for victims, and recovered about £380,000²¹.

The FCA also works with other authorities. In September 2026 it targeted 3 premises suspected of illegal peer-to-peer crypto trading in London, alongside HMRC and the Metropolitan Police Service, following earlier action against illegal crypto trading businesses in April²². These operations are about stopping the activity and, where possible, recovering money, but recovery is never guaranteed: if money has been spent or moved overseas, even a court order may not bring it back.

Warnings, bans and the unauthorised firms list

The FCA publishes what it knows. Its Warning List is a list of firms and individuals that it knows are operating without its authorisation²⁴, and it can be used to check if a firm or individual is known to the FCA to be operating without permission or running scams¹. If the FCA has published a warning about an unauthorised firm, it appears on the Firm Checker and FS Register when you search for the firm, with the full list on the FCA Warning List¹⁹.

The scale of the problem is large. Between January and October 2020 the FCA reviewed and assessed over 24,000 reports of unauthorised business activity²⁵. Not every report leads to a warning or a prosecution, but each one helps build the picture. The FCA has also used its enforcement powers prospectively: when consumer credit regulation was transferred to it, firms that did not register for interim permission were told they must stop carrying out regulated consumer credit activities after 31 March 2014 or face enforcement action and possible criminal offence²⁶.

A warning is a signal, not a guarantee in either direction. A firm appearing on the Warning List is a serious red flag. A firm not appearing on it is not proof it is safe, only that the FCA has not published a warning about it. The definitive check on whether a firm is authorised is the FCA Register, covered in the last section of this page.

How claims management companies are policed

Claims management companies (CMCs), the firms that pursue compensation claims on your behalf, were brought under FCA regulation in April 2019, and complaints about them were transferred to the Financial Ombudsman Service at the same time²⁷. Since then, the same enforcement framework applies to them as to other regulated firms.

Poor conduct by a claims company can include breaking the conduct rules for claims companies, making unsolicited calls or texts, and not being registered on the financial services register¹¹. If you are unhappy with the conduct of a claims company, you can complain to the FCA¹¹, but remember the limit from earlier: the FCA cannot pay compensation or order a claims management company to compensate you, even if you have received poor service¹¹. For money, you complain to the company first and then to the ombudsman.

Where FCA action has fallen short

The FCA's record is not unblemished, and knowing where it has been criticised helps set realistic expectations. The most serious case is London Capital & Finance (LCF). The Treasury Committee's review found that although the FCA had a repeated financial promotion breaches policy, it was not sufficiently robust, and breaches were not referred to supervision or enforcement⁸. It also found the FCA had failed to use its powers to intervene in the case of LCF due to a risk-averse culture⁸. Thousands of investors lost money before the firm collapsed.

The criticism is not confined to one case. The FCA revised its branch and ATM closure guidance in 2022, stating that some banking companies had "fallen short of expectations"²⁸. In the summer of 2023, in response to public interest around the rejection and termination of payment accounts, it conducted a data collection exercise to improve its understanding of why that was happening, including in the context of basic bank accounts²⁹. And evidence to Parliament has argued that the FCA's statutory objectives, traceable to the creation of the FSA in the FSMA 2000, were no longer aligned with the needs of investors by 2017³⁰.

None of this means the FCA's powers are useless, but it does mean they depend on the FCA choosing to use them in time. That is the practical case for not relying on regulation alone: check who you are dealing with, keep your own records, and use the complaint routes while the firm is still trading.

Complain to the firm first, then the Financial Ombudsman

If you have lost money or been treated badly, the route is fixed and it starts with the firm. The ombudsman's guidance is that you must make a formal complaint to the business first, and you can come to it only if the firm does not reply or you are unhappy with its final response⁴. A firm regulated by the FCA has to make a final decision on the matter within eight weeks⁵.

The complaint route, step by step, from the firm's final response to an ombudsman award

The ombudsman can decide on an appropriate remedy, including a money award up to a limit set by the FCA or a direction to the firm¹². Depending on the complaint, it may ask the firm to refund payments you did not authorise, refund charges and interest your bank has applied, compensate you for money you lost, or pay compensation for distress or inconvenience³³. It also considers whether a firm should compensate a consumer for distress or inconvenience where the firm has not met its obligations and harm was caused, particularly for a consumer in vulnerable circumstances³⁴.

The ombudsman's helpline is 0800 023 4567, free from a landline, or 0300 123 9123 for mobile users who pay a monthly charge for calls to numbers starting 01 or 02, open Monday to Friday 8am to 8pm and Saturday 9am to 1pm⁶. The FCA's own consumer helpline is 0800 111 6768, and it provides its information in large print, Braille or audio format⁶. If the firm has gone out of business, the FSCS may compensate its UK customers, subject to its rules and limits²³, though it does not protect everything: for example, it does not protect money a debtor pays under an individual voluntary arrangement arranged by insolvency partners, which are not regulated by the FCA, or debt advice³⁵.

Checking a firm before you deal with it

Checking a firm before money changes hands is the main safeguard available. The FCA is the go-to contact for checking whether a firm is legitimate or reporting a possible scam³⁶. Its online register and consumer helpline are the routes for this³⁷, and the FCA's Firm Checker confirms whether a firm is authorised and helps avoid scams⁴. The FCA also warns that contact details can be checked against those listed on Firm Checker, because scammers sometimes pose as a real firm⁴.

The FSCS sets out the steps in its guide to checking protection: first, check your provider is authorised by the FCA; second, find out if the particular activity the firm is carrying out for you is regulated by the Prudential Regulation Authority or the FCA³⁸. The second step matters because a firm can be authorised for some activities and not others, and protection follows the activity, not just the firm's name. The FSCS follows rules set by the FCA and the PRA, who also set the compensation limits³⁹.

For more on how the pieces fit together, see who regulates what, the FCA's role for consumers, what the FCA does and does not cover, and the comparison of FSCS or Financial Ombudsman: who to go to. If your complaint is about the regulator itself rather than a firm, see complaining about the FCA.