The Financial Conduct Authority (the “FCA”) has taken its first criminal action under the Consumer Credit Act 1974 against an individual who allegedly operated as a consumer credit lender without the requisite license or authority from the FCA. James Walton, Partner at solicitors Rosling King, discusses the case against Mr Dharam Prakash Gopee.
On 1 April 2014, the Financial Conduct Authority (the “FCA”) took over the regulation of consumer credit activities from the Office of Fair Trading (the “OFT”). The FCA subsequently released its strategic objectives and the supporting three operational objectives, which are to secure an appropriate degree of protection for consumers, to protect and enhance the integrity of the UK financial system and to promote effective competition in the interests of consumers.
Following the transfer from the OFT to the FCA, the FCA now has the power to investigate and prosecute individuals or firms who undertake unauthorised business. This power is codified in the Financial Services and Markets Act 2000. In a bid to adhere to the abovementioned principles the FCA is actively pursuing those who it believes are acting outside of their consumer credit permissions.
The first criminal action taken by the FCA under the Consumer Credit Act 1974 is against Mr Dharam Prakash Gopee. The FCA alleged that Mr Gopee acted as an unlicensed consumer credit lender and that he targeted consumers who were often in difficult circumstances, loaning them money and often registering charges over their homes so that when the borrower defaulted, Mr Gopee was able to take possession of the properties. Mr Gopee has been accused of conducting a regulated activity without the correct permissions on the basis that he entered into and administered regulated credit agreements as a lender from 2013 to date.
The FCA believes that Mr Gopee lent over £1 million since 2013 without holding a consumer credit licence from the OFT or, post April 2014, the equivalent authorisation from the FCA.
On 17 January 2017 Mr Gopee appeared at Westminster Magistrates Court. The case against him has been provisionally listed for trial on 14 February 2017 at the Southwark Crown Court.
This is the first time the FCA has pursued criminal action against an individual in accordance with its consumer credit powers. This clearly demonstrates the FCA’s commitment to its obligations with regards to consumer credit and that it is willing to take the necessary steps to enforce the same.