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 investme
Suggested Considerations
- Immediate verification: Check client-facing promotions, websites, and advisor scripts for any reference to holiday lodge/park schemes; ensure no endorsement of unauthorised products.
- Client communication review: Audit advice processes to flag and reject high-risk, unregulated collective schemes; document refusals.
- Training and monitoring: Update firm-wide training on CIS definitions (per COLL sourcebook) and unauthorised promotion risks; enhance surveillance of emails, social media, and third-party referrals.
- Internal reporting: Escalate any suspected unauthorised promotions to the FCA via Connect or the unauthorised firms reporting form (https://www.fca.org.uk/consumers/report-scam-unauthorised-firm).
- Due diligence: For authorised firms, implement pre-approval checks under the financial promotions regime (PERG 8 guidance) to confirm partner schemes are not CIS.
- Consumer-facing: Display FCA warnings on relevant webpages and advise clients to use the Warning List (https://www.fca.org.uk/consumers/warning-list-unauthorised-firms).
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
AI-generated analysis. May contain errors or omissions — verify with the original FCA source before acting. Full disclaimer.
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...