Digital transactions using smartphones may be putting consumers at risk.
The warning comes from The Financial Conduct Authority (FCA) which has today published its annual Sector Views, an assessment of the risks and potential harm to consumers across financial services markets.
Many new payments firms have been able to enter the market and grow quickly, but some of their products don’t have protection in place for consumers, for example e-money services advertised as ‘current accounts’ aren’t covered by the Financial Services Compensation Scheme says the report.
The FCA also warm that although it has seen a number of positive corrections in the credit market, its Financial Lives data shows that 7.4 million UK adults are over-indebted and find their financial commitment a burden.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA and interim Chief Executive designate, said:
‘We are committed to reducing harm in the markets we regulate. Our analysis of markets ensures that we do this effectively, helping us to decide where to focus our attention. We expect firms to be similarly focused on preventing harm and assisting us where they can, and we will continue to actively supervise all firms to ensure they achieve this.
‘What is clearly apparent from the Sector Views, is that many of the harms we are seeing are created by a significant number of smaller firms we regulate or firms beyond our remit.
‘The findings in the report will contribute to our upcoming Business Plan and the decisions we make affecting consumers, market integrity and competition.’