Key Facts
- •The Financial Conduct Authority (FCA) brought a claim against four defendants (two companies and two individuals) for contraventions of the Financial Services and Markets Act 2000.
- •The defendants were involved in providing high-cost loans to financially distressed individuals at risk of repossession, often using deceptive practices.
- •Two trials were conducted: the first addressed 45 cases, the second addressed an additional 26 cases.
- •The defendants were debarred from defending the claim and were not represented.
- •The cases involved two types of transactions: regulated mortgage contracts (RMCs) and sale and rent-back agreements (SRAs).
Legal Principles
General Prohibition on carrying on regulated activities without authorization or exemption.
Financial Services and Markets Act 2000 (s.19(1))
Unenforceability of agreements made in contravention of the general prohibition.
Financial Services and Markets Act 2000 (s.26)
Definition of "regulated mortgage contract" (RMC).
Financial Services and Markets Act 2000 (Regulated Activities) Order (SI 2001 No. 544) (art. 88, 61)
Specified activities relating to RMCs.
Financial Services and Markets Act 2000 (Regulated Activities) Order (SI 2001 No. 544) (art. 25A)
Liability as knowingly concerned in contraventions.
Financial Services and Markets Act 2000 (s.36)
Court's power to make remedial and restitution orders.
Financial Services and Markets Act 2000 (ss. 380, 382)
Outcomes
The court found that the defendants contravened the general prohibition and were knowingly concerned in those contraventions.
The defendants engaged in a systematic pattern of deceptive practices to secure high-cost loans for vulnerable individuals.
Declaratory relief was granted, declaring the unenforceability of various agreements.
The agreements were made in contravention of the general prohibition.
Remedial orders were made requiring the removal of restrictions on property titles.
The restrictions were obtained through the defendants' unlawful conduct.
Restitution orders were made against the defendants for losses suffered by the consumers.
The restitution orders are intended to compensate the consumers for their losses, calculated by reference to loss suffered and profit made.