Mansfield Town FC owner John Radford has been fined more than £1million.
Doncaster insurance company One Call and boss John Radford have been fined more than £1m for inadvertently spending £17.3m of client money on working capital and payments to directors.
The Financial Conduct Authority fined the firm £684,000 for failing to arrange adequate protection for client money over nine years.
Mr Radford was fined £468,600 after the FCA decided he ‘is not fit and proper to have any responsibility for client money or insurer money’... ‘on the basis of his lack of competence to perform such functions’.
It has also stopped One Call charging renewal fees to customers for 121 days, which is expected to cost the firm £4.6m.
The firm, based on Balby Carr Bank, employs more than 500 and has 510,000 customers.
In its decision notice the FCA states: ‘One Call inadvertently spent client money, resulting in a substantial deficit of £17.3 million, (which it has subsequently repaid) and exposing customers to a significant risk of loss.
‘The FCA believes that One Call inadvertently used sums from its client money bank account to finance its own working capital requirements, make payments to directors and, indirectly, to capitalise One Insurance Ltd, although no allegation of wrongdoing is made against One Insurance Ltd’.
A connected company, One Insurance Ltd, has challenged the decisions in the Upper Tribunal, which may make amendments.
The FCA states: ‘One Call and Mr Radford agreed to settle at an early stage of the investigation and qualified for a 30 per cent discount.
‘Were it not for this, the FCA would have decided to impose a fine of £977,147 and a restriction for a period of 182 days on One Call and a fine of £669,531 on Mr Radford.
A One Call spokesman said: “In early 2014, One Call Insurance Services and John Radford realised they had made an error in the client money calculation and immediately reported it to the FCA.
“The client money deficit was then rectified. Both One Call Insurance and John Radford express regret for this miscalculation. Their intention, as always, was to help consumers achieve the best possible price in an increasingly competitive motor insurance market.
“A section 166 notice was issued to One Call Insurance Services by the FCA and recommendations were made which included strengthening its board of directors. One Call Insurance Services immediately put any recommendations into place. Subsequently a skilled persons report was carried out by Deloitte and the section 166 was concluded and closed in June 2015. No additional action has been taken by the FCA since that date.
“In the decision Notice, it is acknowledged that ‘One Call Insurance has invested heavily in additional management and its systems and controls… there has been widespread improvements in the firms Governance Framework and finance function’.
“One Call Insurance Services accepted its mistake four years ago, implemented changes and resolved this matter with the FCA at the earliest opportunity. There has been no suggestion of any dishonesty and it is accepted that the mistakes were genuine.
“Throughout this period, no consumer was without motor insurance and neither were they at any financial loss. There was no commercial loss to any insurer or any other trading partner.
“One Call Insurance Services accepts the fine and restrictions imposed. One Call Insurance Services have been aware of the financial penalty for some time and have made financial provisions within forecasts.
“The FCA suggest that John Radford cease to be responsible for client money, a responsibility he had already relinquished in 2011 due to the growth of One Call Insurance and his other business interests. Therefore John Radford has agreed with the FCA’s recommendation.”