Money Covered: The Week That Was – 13 February 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

On the fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, Mel is joined by David Allinson to discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

To listen to this and all previous episodes, please click here.

Our latest edition of the Financial Ombudsman Newsletter is out now and can be found here.

Headline development

Authorised Representatives to be brought within the scope of FOS

A consultation paper released by the Treasury on 12 February (the Paper) has proposed bringing appointed representatives (ARs) into the scope of FOS' jurisdiction.

Under the Senior Managers and Certification Regime, all complaints about ARs are currently heard by the principal firm due to ARs not being directly authorised. The proposed changes in the Paper state that FOS would initially investigate a complaint in its usual manner (by investigating the principal firm), but if FOS determines that a principal firm "cannot be held responsible for its AR's acts or omissions, the FOS will be able to directly consider the complaint against the AR itself."

In circumstances where complaint against an AR is upheld, it is proposed that FOS be able to direct any appropriate redress measure to the AR.

These proposed changes will likely bring further regulatory responsibility for ARs, whose principles will also need to obtain authorisation from the FCA to use ARs. There will also be questions around what this is likely to mean for professional indemnity insurance – for example in circumstances where an AR's capital is insufficient to address its compensation liabilities.

To read the Paper, please click here.

Regulatory developments for FCA regulated entities

FCA issues civil proceedings against HTX Exchange over illegal UK crypto promotions

On 10 February 2026, the Financial Conduct Authority (FCA) announced that it had issued civil proceedings against HUOBI GLOBAL S.A. (HTX Exchange) (HTX). The FCA has alleged that HTX promoted crypto-asset services to UK consumers without authorisation or approval under section 21 of the Financial Services and Markets Act 2000 (FSMA).

The FCA had previously warned HTX, along with other firms, that it was in breach of the financial promotion rules under FSMA Section 21. However, the FCA received no substantive response.

HTX claims that it was aware of the rules and had stopped targeting UK customers prior to the FCA's warning. However, their website remained accessible to UK consumers, and an FCA employee was able to purchase crypto-assets and carry out a crypto-asset futures trade from the UK.

This claim represents the first enforcement action that the FCA has brought against a crypto-asset firm for illegally marketing products to UK consumers. It marks an escalation in the FCA's approach to prioritising financial crime and the reference to other firms being given a warning in the Particulars of Claim served on HTX suggests that we may see further similar claims being brought

To read more, please click here.

FCA ramps up financial influencer enforcement actions

A Freedom of Information (FOI) request revealed a 174% increase in enforcement actions against financial influencers in 2025 – increasing from 27 in 2024 to 74 in 2025. In prior years, the FCA more commonly relied on warning alerts and interviews under caution, rather than formal legal action.

2025 saw regulators across the globe joining forces to protect social media users. However, the UK still trails some countries, with Canada recording 277 actions.

The FOI request was submitted by Brokerchooser whose head broker, Adam Nasli commented that: "Regulation does not eliminate market risk or even the risk of fraud, but it significantly reduces the likelihood of bad actors holding on to traders' money, and the emergence of misleading structures and uneven playing fields."

Nasli also emphasised the importance of transparency and that AI-driven tools are able to play a meaningful role.

To read more, please click here.

FCA issues policy statement on Buy Now Pay Later regulation

The FCA has published a policy statement on its approach to the regulation of deferred payment credit (DPC) (AKA buy-now-pay-later).

Interest-free credit products repayable in 12 or fewer instalments in 12 months or less are currently exempt from regulation but will be regulated from 15 July 2026 (via the Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025 (SI 2025/859)). DPC agreements taken out before 15 July 2026 (Regulation Day) will remain unregulated.

The statement follows calls for greater clarity on expectations in some areas in response to the FCA's consultation in July 2025 (CP25/23). Most of the existing rules in the Consumer Credit Sourcebook (CONC) and FCA Handbook requirements (including the Consumer Duty) will apply to DPC.

As a result of DPC becoming regulated, the FCA has said consumers will benefit from:

• Clear information: Consumers will get clear, upfront details about their agreement, including when payments will be due, amounts, and what happens if they miss a payment. There are new rules for DPC lenders to provide product information to a borrower before they enter a DPC agreement. The FCA will make sure consumers are given ‘key product information’ that is most important to their decision making.

• Affordability checks: Lenders must carry out proportionate checks to make sure customers can afford to repay what they borrow before offering DPC. The FCA will apply its existing creditworthiness rules to DPC lending, including to agreements of less than £50 to ensure DPC firms ensure borrowers can afford to repay.

• Support when needed: Lenders will need to offer support to customers in financial difficulty. The FCA will introduce new guidance to remind firms of their obligations under the Duty’s consumer understanding and consumer support outcomes. There will also be new rules requiring firms to provide information to DPC borrowers who have missed a repayment, and to give notice to the customer before taking certain action. The FCA will require DPC lenders to provide information about free debt advice in certain circumstances.

• Complaints and compensation: consumers will be able to complain to the Financial Ombudsman Service.

DPC will be treated as consumer credit agreements which will require firms to be authorised by the FCA by Regulation Day. There will be a temporary permissions regime for firms meeting certain criteria and firms will then have six months from Regulation Day to apply for full authorisation. The CA will publish further directions on this in due course.

To read the FCA's press release click here.

Emerging risks

FCA publish review into the impact of AI in retail financial services

On 20 January 2026, the Treasury Committee published a report into the use of Artificial Intelligence (AI) in financial services. This report, whilst outlining the risks that AI poses on financial services, was largely critical of the FCA for the speed at which the regulator was responding to the emerging risk of AI.

The Treasury Committee highlighted that in the FCA adopting a 'wait and see' approach with the implementation of AI, consumers were at risk of inaccurate, opaque and damaging outcomes, all of which negatively affect the market and profession. Following the Treasury Committee report, the FCA have launched a consultation looking at how AI will reshape retail financial services, including how AI will impact firms and markets as well as the future regulatory approach.

The FCA review, which is due to close on 24 February 2026, is seeking views from across the financial services market before reporting further and setting out recommendations.

To read RPC's blog on the Treasury Committee report and the FCA's consolation, please click here.

To read the FCA's consolation, please click here.

Relevant case law updates

Capita PLC lose strike out application of £4m claim

The High Court in Spurgeon and Others v Capital PLC [2026] EWHC 241 (KB), dismissed Capita's application to strike out a claim on the basis that the Claimants' representatives abused the court process by incorrectly pleading the Claimants' loss as emotional harm and torment. The Court, whilst confirming the pleadings should be re-worded to avoid certain words or phrases which were unclear and could lead to misinterpretation, ultimately decided that striking out the entire claim would be disproportionate.

The claim stems from a cyberattack against Capita in 2023 which saw the sensitive personal data of millions of people stolen by cyber criminals. Following the data breach, those individuals whose data was stolen, sought compensation for the emotional harm suffered.

In October 2025, the Information Commissioner's Office handed Capita PLC an £8m penalty and fined Capita Pension Solutions Ltd £6m for failing ensure that customers' personal data was securely processed during the attack.  Despite Capita handling a significant volume of pension plans across the UK, it was found to lack the appropriate technical and organisational measures to respond to the cyber attack and protect their customers' private information.

The Judgment serves as a reminder of how seriously the Court takes the welfare of data breach victims and the victims rights to seek compensation.

To read the Judgment, please click here.

Upper Tribunal dismisses HMRC appeal on extended disclosure in tax dispute

In a judgment on 23 October 2025, the Upper Tribunal ruled against HMRC's appeal against certain case management directions and confirmed that there is no general rule that extended disclosure must apply equally to both sides in a tax dispute.

In first instance case, HMRC alleged that Ducas Ltd (Ducas) facilitated the evasion of more than £171m in national insurance contributions, and that Ducas had supplied its customers with fraudulent documents that demonstrated that both income tax and national insurance contributions had been properly deducted and paid.

In the case management hearing, the First-Tier Tribunal (FTT) directed HMRC to provide a wider form of extended disclosure, beyond the standard disclosure rules under the Tribunal Procedure Rules 2009. HMRC was required to provide, not only the documents it would rely on, but also any material in its possession that either supported Ducas' case or undermined its own. This stood in contrast to the standard disclosure ordered of Ducas.

The difference in disclosure orders was due to the significant imbalance in the parties' access to potentially relevant material, and the burden of proving fraud falling on HRMC.

HMRC sought to appeal the FTT's disclosure directions on the basis that fairness demanded reciprocal disclosure obligations.

The Upper Tribunal dismissed the appeal and emphasised that disclosure orders must be party-specific and issue-specific, rather than imposed equally without regard to a matter's factual matrix.

The decision highlights the high threshold for interfering with case management decisions and serves as a stark reminder that disclosure applications must be determined on the specific facts and circumstances of the case. HMRC may have been more successful if it had advanced fact-specific arguments for Ducas' extended disclosure, rather than arguments of fairness and rationality.

To read more, please click here.

Court of Appeal shifts the landscape of substitution of parties after expiry of limitation

In a judgment handed down on 6 February 2026, the rules concerning the substitution of parties after limitation expires dramatically shifted.  The two appeals heard together (both of which involved the same law firm defendant), Adcamp LLP v Office Properties PL Ltd and BDB Pitmans LLP v Lee [2026] EWCA Civ 50, concerned underlying claims for professional negligence against a firm of solicitors.  The firm alleged to have carried out the negligent work was Pittmans LLP, but that firm had since undergone a merger, with the result that Pittmans LLP no longer existed and the successor entity was BDB Pittmans LLP (BDBP).

In both cases, the claimants were aware that BDBP had not carried out the work complained of but named them in the proceedings in any event because, they alleged, BDBP had acquired the liabilities of Pittmans LLP. Further to BDBP's application for summary judgment, both Claimants cross-applied to substitute the correct party in the proceedings.  There are generally two categories of cases for substitution after limitation.  The first is where the claimant names the incorrect party believing that they are, in fact, the responsible party; the second are cases where the claimant names the successor entity in the mistaken belief that that entity has become responsible for the acts of the correct entity.

These cases concern the second type of substitution, and the test for allowing this substitution is whether the claim, after substitution, was the same claim as the one previously pursued.  Non-binding judicial opinion which had been followed by courts until this judgment, found that the fact that the two claims concerned would differ in that the identity of the defendant would change did not fall afoul of the test and substitution could be allowed.  The Court of Appeal has now affirmed the test but held, for the first time, that a change in identity of the defendant party is inherently not the same claim and so substitution cannot be permitted.  The impact of this is that applications for substitutions which fall into this second category will not be allowed.

The Court of Appeal has now granted permission for the Claimants in these cases to appeal this judgment, so it remains to be seen whether this new rule will remain in place. The problem of wrong entities being named is a common one in the field of professional negligence, so this will be a case to keep a close eye on.

To read more, click here.

With thanks to this week's contributors: James Parsons, Alison Thomas, Daniel Goh, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss