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UK watchdog targets unregulated lenders for financial crime

The British Financial Watchdog has said that it is stepping up its scrutiny of unregulated lending companies, leasing companies and money brokers because of concerns they could facilitate financial crimes.

Financial Conduct Authority (FCA) said that it is concerned by the risks to consumers and the markets from unregulated lending which often involves complex structures.

In a'statement, it said that it had sent information requests to 900 'Annex 1 firms. These include lenders, leasing companies, and other financial firms which are subject to anti -money laundering rules, but not fully regulated by FCA. This increased scrutiny comes after the collapse of Market Financial Solutions in February. The FCA, who supervises MFS to ensure compliance with anti-money-laundering?rules, but does not regulate the firm as a fully authorized firm, launched an?investigation into the mortgage lender in the following month.

The FCA had already expressed concerns about this sector.

In March 2024 it wrote to Annex 1 companies?to warn them that supervisors found weaknesses in their control against financial 'crime, such as inadequate'staff training and underresourced compliance teams. In 2025, it sent a second letter. (Reporting and editing by Tommy Reggiori Wilkes, Alexander Smith and Phoebe Seers)

(source: Reuters)