An insurance broker has been fined £684,000 for inadvertently spending its customers’ funds and its chief executive has been banned from handling client money.
One Call Insurance Services was found to have breached rules that require client funds to be kept separate at all times. It inadvertently spent some of the money, causing a shortfall in client funds of £17.3 million. Although the sum has been repaid, customers were exposed to a “significant risk of loss”, the Financial Conduct Authority said.
It censured the company for also failing to treat funds belonging to third-party credit companies in accordance with the rules of certain motor policies. The watchdog banned the company from charging customers renewal fees on their policies for 121 days, which the FCA said could cost it about £4.6 million.
John Radford, One Call’s chief executive, oversaw client money between 2005 and 2011 and was responsible for ensuring that it complied with regulatory requirements. The FCA said that he did not have “robust systems and controls” in place.
Mr Radford, who is also chairman of Mansfield Town, the League Two football club, was not “fit and proper” to have any responsibility for client or insurer funds because of his “lack of competence”, the regulator added. He was fined £468,600. Both One Call and Mr Radford settled early in the inquiry and expressed regret for a “miscalculation”.
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One Insurance Limited, a company linked to One Call, has challenged the FCA’s findings and referred the case to the Upper Tribunal.