Financial Conduct Authority

The Financial Conduct Authority (FCA) is the UK regulator responsible for the conduct of financial services firms and markets. If you use a bank account, take out a mortgage, buy insurance, invest money, apply for credit or use a pension provider, the FCA’s rules are designed to help ensure you are treated fairly.

For consumers, the most useful thing to understand is how to check whether a firm is authorised, what protections may apply if something goes wrong, and what to do if you need to complain. This guide explains the Financial Conduct Authority in plain English, with practical steps for UK consumers.

What is the Financial Conduct Authority?

The Financial Conduct Authority is an independent public body that regulates financial services firms and financial markets in the UK. Its role includes protecting consumers, maintaining the integrity of financial markets and promoting healthy competition between providers. The FCA works with HM Treasury and is accountable to Parliament.

The FCA regulates the conduct of around 35,500 businesses across the UK. These include banks, building societies, insurers, mortgage providers, investment firms, consumer credit firms, pension providers and other businesses carrying out regulated financial activities.

It is important not to confuse the FCA with the Prudential Regulation Authority (PRA). The PRA focuses principally on the safety and soundness of banks, building societies, credit unions and insurers. The FCA focuses on how firms behave towards consumers and markets. Some larger financial firms are regulated by both bodies.

What the FCA does

The FCA has three operational objectives under the Financial Services and Markets Act 2000: protect consumers, protect and enhance the integrity of the UK financial system, and promote effective competition in the interests of consumers.

The FCA does not guarantee that every financial product will be suitable for every person, nor does it remove every risk from investing or borrowing. Its role is to set and enforce standards, supervise firms and intervene where consumers may be at risk of harm.

Which firms does the FCA regulate?

In the UK, nearly all financial service providers must be authorised or registered by the FCA. The FCA says this includes banks and building societies, as well as firms offering mortgages, credit cards, funeral plans, loans, savings, pensions and investments.

However, not every business connected with money is regulated by the FCA. Some professional firms, such as solicitors, accountants and actuaries, may be regulated by other bodies. Certain activities may also be exempt, depending on their nature and circumstances. That is why checking the Financial Services Register is important before you hand over money or personal information.

Examples of regulated services

• Current accounts, savings accounts and payment services.
• Mortgages, credit cards, personal loans and other consumer credit.
• Insurance products and insurance distribution.
• Investments, pensions and financial advice.
• Funeral plans and certain consumer credit activities.
• Financial promotions and advertisements for regulated products.

Authorisation is not a blanket approval for every service a business offers. A firm may be authorised for one regulated activity but not another. For example, a firm may have permission to arrange insurance but not to provide investment advice. Consumers should check that the firm’s permissions match the service being offered.

How the FCA protects consumers

The FCA sets standards for how firms should treat customers, monitors firms after authorisation and takes action when firms fail to meet its rules. It can impose fines, restrict or stop firms from trading, and seek redress for consumers in appropriate cases.

One of the FCA’s most significant consumer-protection frameworks is the Consumer Duty. It sets the standard of care firms must give retail customers and requires firms to act to deliver good outcomes for them.

The Consumer Duty

Under the Consumer Duty, firms must act in good faith, avoid causing foreseeable harm and support customers in pursuing their financial objectives. The FCA also expects firms to focus on four outcomes: product and service governance, price and value, consumer understanding and consumer support.

In practical terms, consumers should expect:

• Clear communications that are easy to understand.
• Products and services designed to meet customer needs.
• Fair value compared with the benefits provided.
• Support when they need it, including help if circumstances change.
• Effective and prompt handling of complaints.

The Consumer Duty applies to firms providing services to retail customers. It is not a promise that every product will be right for every individual, but it does raise expectations for fairness, transparency and customer support.

How to check if a firm is authorised

Before using a financial firm, check that it is authorised and has permission for the specific service you want. The FCA provides two main tools: the Financial Services Register and the FCA Firm Checker.

The Financial Services Register is a public record of firms and individuals that are, or have been, authorised by the FCA or the PRA. It shows a firm’s status, reference number, permissions, contact details and any relevant restrictions. The FCA Firm Checker is a consumer-focused tool that helps people check whether a firm is authorised and has permission for the service it is offering.

Steps before using a financial firm

1. Search for the firm by its exact legal name, firm reference number or website address.
2. Check that its status is listed as authorised or registered, rather than cancelled, revoked or subject to restrictions.
3. Confirm that its permissions cover the product or service you intend to use.
4. Check the firm’s contact details independently, rather than relying only on details provided in an email, advert or social media message.
5. Look for warnings on the FCA Warning List if you have concerns about a firm or individual.
6. Keep records of communications, contracts, statements and payment details.

Scams and unauthorised firms

Scammers often imitate legitimate financial firms, use professional-looking websites or contact people through social media, messaging apps and cold calls. They may promise guaranteed returns, pressure people to act quickly or ask for payment through unusual methods.

The FCA publishes warnings about firms it believes are operating without authorisation or running scams. Its Warning List identifies firms that the regulator is concerned are providing financial services or products without permission.

Warning signs of a potential scam

• Guaranteed or unusually high returns with little or no risk.
• Pressure to invest, transfer money or make a decision quickly.
• Contact out of the blue by phone, email, text or social media.
• Requests to move money to a personal account or through cryptocurrency.
• A firm claiming to be authorised but not appearing correctly on the FCA Register.
• Reluctance to provide a firm reference number, written terms or clear contact details.
• Complex investments that are difficult to understand or withdraw from.

If you think you have been targeted by a scam, stop communicating with the firm, do not send further money and contact your bank immediately if you have already made a payment. You can also report the concern to the FCA.

Your rights as a UK consumer

Consumers have rights when dealing with regulated financial firms. The FCA says authorised firms must meet its standards and follow its rules, including requirements to treat customers fairly and handle complaints properly.

If something goes wrong, start by complaining directly to the firm. Give clear details, include dates, account references and any supporting documents, and ask for a written response. Firms carrying out regulated activities generally must have effective and transparent procedures for handling complaints reasonably and promptly.

If you remain unhappy with the firm’s final response, or it does not respond within the relevant time limit, you may be able to refer the complaint to the Financial Ombudsman Service. The Ombudsman can consider certain complaints about financial businesses and may require a firm to put things right.

Financial Services Compensation Scheme

The Financial Services Compensation Scheme (FSCS) can protect customers when an authorised financial firm fails and cannot pay claims against it. Protection depends on the type of firm, the product and the circumstances of the claim.

Do not assume that FSCS cover applies automatically. The FCA advises consumers to check the firm’s Register entry and the relevant protection rules before relying on compensation. For example, protection limits and eligibility can differ between deposits, investments, insurance and advice.

How the FCA works with other regulators

The UK financial regulatory system involves more than one organisation. The FCA regulates conduct, while the Bank of England’s Prudential Regulation Authority supervises the prudential safety and soundness of certain firms. The FCA also works with HM Treasury, the Payment Systems Regulator and other bodies where responsibilities overlap.

For consumers, the practical distinction is straightforward: the FCA is usually the first place to check whether a firm is authorised to provide a regulated financial service. If you are unsure whether a firm is regulated, or whether its permissions cover the service you need, contact the FCA for guidance.

What the FCA cannot do

The FCA has significant powers, but it is not a personal financial adviser, ombudsman or compensation scheme. Understanding these boundaries can help you use the right organisation if you need help.

Practical tips before you invest or borrow

Financial decisions can have long-term consequences, so take time to understand what you are buying. The FCA’s InvestSmart campaign highlights the risks of investing online, particularly where people encounter promotions through social media or online adverts.

• Check the firm and individual on the FCA Register before providing personal details.
• Make sure the firm has permission for the exact activity involved.
• Be cautious with investments promoted through social media, influencers or messaging apps.
• Never rely on guaranteed returns; all investments carry some risk.
• Compare fees, charges, exit terms and the total cost of borrowing.
• Read key documents, including terms, key features and risk warnings.
• Keep evidence of every conversation, agreement and payment.
• Seek regulated financial advice for complex or high-value decisions.

Why this matters for everyday consumers

Financial services affect almost every part of modern life, from paying bills and borrowing for a car to saving for retirement or protecting a home with insurance. The Financial Conduct Authority exists to make those markets work better for consumers, not only for the firms operating within them.

For people in Worcester and across the UK, the most valuable habit is simple: verify before you trust. Check the firm, check its permissions, understand the product and know how to complain if something goes wrong. Those steps will not eliminate every risk, but they can significantly reduce the chance of falling victim to a scam or dealing with an unsuitable provider.

Frequently asked questions

What does the Financial Conduct Authority do?

The Financial Conduct Authority regulates the conduct of financial services firms and markets in the UK. Its objectives are to protect consumers, protect and enhance market integrity and promote effective competition.

Is the FCA a government department?

The FCA is an independent public body rather than a typical government department. It regulates financial services firms and markets, works with HM Treasury and is accountable to Parliament.

How do I know if a financial firm is FCA authorised?

Use the FCA Firm Checker or the Financial Services Register. Search for the firm’s exact legal name or reference number, then check its status and confirm that it has permission for the specific service you want to use.

Does FCA authorisation guarantee my money is safe?

No. Authorisation means a firm is permitted to carry out regulated activities and must meet FCA standards, but it does not remove all risk. Protection may depend on the product, the firm’s permissions and whether schemes such as the FSCS apply.

What is the Consumer Duty?

The Consumer Duty is an FCA framework that sets the standard of care firms must give retail customers. It requires firms to act in good faith, avoid foreseeable harm and support customers in pursuing their financial objectives.

Can the FCA help me get my money back?

The FCA can take enforcement action against firms that breach its rules, and in some cases may secure redress for consumers. However, it is not a compensation scheme. For complaints about a firm’s service, start with the firm and then consider the Financial Ombudsman Service. For compensation after a firm failure, check the FSCS.

What should I do if I think I have been scammed?

Stop contact with the firm, do not send more money and contact your bank immediately if you have made a payment. Report the firm or individual to the FCA and keep all messages, receipts and account details as evidence.

Are all financial companies regulated by the FCA?

No. Nearly all financial service activities must be authorised or registered by the FCA, but some businesses and activities are regulated by other bodies or may be exempt. Always check the specific firm and service before proceeding.