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FSCS reveals single firm behind most of emergency broker levy

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Fuel Investments Limited is the firm responsible for 70 per cent of claims leading to an emergency £15m levy against mortgage brokers, according to the Financial Services Compensation Scheme.

The FSCS confirmed the levy last month after a wave of claims against a then-unnamed firm caused the claims body to increase its forecast levy for the 2017/18 year.

But responding to a query from Mortgage Strategy, the FSCS has revealed that Fuel, a well-known mortgage broker and wealth management firm, was the firm responsible for most of the claims.

The £10.5m of claims against Fuel came from the firm advising clients to remortgage their UK homes to free up money for high-risk property investments.

But the FSCS says it does not expect high claims volumes against Fuel to continue.

It says: “Stripping out these claims reduces the level towards those experienced over recent years, so that on current evidence we would not expect this level of costs to continue into future years.”

Fuel was set up as a limited company in November 2008, though previously SWMS Limited, set up in 2004, traded as Fuel Investments Limited.

Fuel once expressed ambitions to be the biggest directly-authorised mortgage broker in the UK.

The FSCS listed Fuel as being in default in December 2015.

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  • old hand 9th February 2017 at 10:52 am

    FCA not doing their job properly then. if they were in the ball FSCS wouldn’t have to be involved.

  • Jaded Broker 9th February 2017 at 10:50 am

    Just a though…a bit radical I know, but if FUEL have caused the problems, why have the rest of us got to bail them out?

    • Peter Turner 14th February 2017 at 10:49 am

      The answer is because Fuel Investments Limited was dissolved in 2014.

      Curiously, the people listed on the Financial Services Register as its directors are not listed on the Companies House register as its directors.

      That suggests to me that the FSA (as was) did not check when authorisation was first applied for.

      It would seem a fairly basic piece of due diligence for it to have done, though.