FCA complaints rocket after Lloyds deal

FCA logo glass 2 620x430Complaints agains the FCA rocketed to 154 in February, more than triple the number of the previous month.

The number of complaints compared to 48 in January and 30 in December. From 1 December 2014 and 30 November 2015 the FCA received 491 complaints against them.

The rise in complaints about the regulator in February was due to the FCA’s role in Lloyds’ decision to call its Enhanced Capital Notes at par, says the FCA.

At the end of January Lloyds Banking Group decided to call in £3bn of special bonds, after winning a court case last year.

The court battle centred on the fact Lloyds said it would redeem the bonds at face value, which investors contested was against the product terms.

The enhanced capital notes that were sold to retail investors around the time of the financial crisis. They paid out between 6 and 16 per cent and would have cost the firm around £200m over the next five years.

The notes were sold when the bank was bailed out by the government after the crisis and were intended to be used as a capital buffer. However, the government deemed them not usable as a buffer, which the bank argued was a disqualification event for the notes.

“In February 2016 there was a large increase in complaints, this was mainly due to receiving a large number about the FCA’s role in Lloyds decision to call its Enhanced Capital Notes at par,” says the FCA.

The FCA closed 52 complaints in February and has closed 143 allegations since December 2015. In that period 94 allegations were investigated by the FCA, 48 per cent were not upheld and 52 per cent were upheld in whole or in part.