Upper Tribunal Tax and Chancery Chamber

UT/2023/37 - [2024] UKUT 00229 (TCC)

Fecha: 05-Ago-2024

Submissions

Submissions

80.

We note that there was a degree of confusion around the use of the phrase “non-genuine” by the Authority in relation to the trading names included on the Register. Some of the confusion relates to the fact that the Authority only first appreciated that the NGTNs were not trading names of Promethean, but of independent IPs, in consequence of Promethean’s letter of 14 November 2022. In particular there was confusion around the use of the term “non-genuine trading names”, as the names on the Register were genuine trading names used by the IPs. However, we find that the use of the term “non genuine” by the Authority was rather to the fact that the relevant websites domain names recorded on the Register were not bone fide trading names used by Promethean itself.

81.

Mr Fell submitted that the Authority has two areas of concern. The first is the inclusion of NGTNs on the Register. The second is the use of non-compliant financial promotions by Promethean’s ARs.

82.

As regards the NGTNs, the Authority’s case is that Promethean was adding trading names to the Register that were not genuine trading names used by Promethean. They were in fact website domain names used by independent third-party IPs. This compromised the purpose of the Register under s347(1) FSMA as a user of the Register would be under the impression that these NGTNs were trading names used by an authorised firm. This could result in consumers:

(1)

failing to appreciate that a person they are receiving promotions from (namely, the IP) is outside the regulatory perimeter under FSMA;

(2)

receiving and acting on financial promotions and other communications which do not comply with the Authority’s rules and principles;

(3)

being exposed to business practices of a firm which is failing to take proper steps to ensure it has adequate systems, controls policies and procedures to ensure compliance in this regard; and

(4)

incorrectly assuming that they would receive the same protections when dealing with one of the IPs as would be the case if they were dealing with Promethean.

This gave rise to a risk that a consumer would make a decision that he would not otherwise have made. These risks are heightened by the fact that many of the consumers of the services provided by the IPs and Promethean are likely to be vulnerable by reason of heavy indebtedness, low income and/or limited financial understanding.