Beware of unregulated holiday park investment schemes
Executive Summary
The FCA has issued a consumer warning about unregulated investment schemes in holiday lodges and holiday homes, which are often promoted unlawfully by unauthorised firms, posing high risks or outright scams. These schemes typically involve collective investments without FCA authorisation, breaching UK financial promotion and collective investment scheme (CIS) rules. This matters for compliance professionals as it signals heightened FCA scrutiny on unauthorised promotions, potential enforcement actions, and the need for firms to review marketing materials and client referrals to avoid facilitation risks. #
What Changed
This is not a formal rulemaking or policy change but a consumer alert and enforcement signal under existing regulations. Key reminders include: - Unauthorised firms cannot lawfully promote collective investment schemes (CIS) under section 21 of the Financial Services and Markets Act 2000 (FSMA). - Holiday park schemes pooling investor funds for lodge purchases and management often qualify as unregulated CIS, making promotions illegal. - No new requirements are introduced, but the FCA emphasises its ongoing monitoring and willingness to intervene, including via the Financial Promotions Regime (effective from 7 October 2023 for all firms) which tightened controls on high-risk investments. #
What You Need To Do
- Immediate verification
- Client communication review
- Training and monitoring
- Internal reporting
- Due diligence
- Consumer-facing
Compliance Impact
Urgency: High. This alert indicates active FCA enforcement priority on consumer-facing scams in property-linked investments, with risks of fines, bans, or asset freezes for non-compliance (e.g., similar to past actions against mini-bond issuers). Firms face heightened supervisory visits or thematic reviews; inaction could lead to principal liability for facilitating unauthorised activities, especi
Who is Affected
Summary
A growing number of investment schemes are being promoted unlawfully, are high risk and may even be scams. We've identified a growing number of investment schemes in holiday lodges and holiday homes being promoted to UK consumers by companies that are not FCA authorised.They may be unregulated collective investment schemes, where several investors invest their money. The schemes are being promoted unlawfully, are high risk and may even be scams. We remind consumers that if you invest in an un...