New car retailer banned by FCA as he's unfit to carry out F&I activity

A director of new car brokerage in the north east of England has been banned by the Financial Conduct Authority from carrying out any regulated consumer finance or insurance activities because it has deemed him to be "not a fit and proper person".

The finance regulator has tackled Graham Lilley, who traded as Global Car Leasing in Newcastle, because he wasn't open with the FCA after he received a criminal conviction in 2022.

Lilley had been authorised by the FCA to since 2017 to operate as a sole trader credit broker, and sourced cars ranging from Audis to Range Rovers for clients through his Global Car Leasing business.

In 2021, while an authorised person under the FCA's regulations, Lilley committed fraud with a customer and was prosecuted at Newcastle Crown Court.

The case concerned an agreement to sell a customer's luxury car on the basis that the customer would receive £60,000, and anything above that, as Lilley had valued the car at £63,000, would be Lilley's commission.

Yet without the customer's knowledge Lilley sold the car for £54,000, and went on pretending that he was still attempting to sell it for several months before handing the customer a cheque which subsequently bounced.

Lilley told police the £54,000 had been swallowed up in his business accounts.

After admitting the criminal offence of dishonestly making false representations to make gain for self/another or cause loss to other/expose other to risk contrary to Section 2 of the Fraud Act 2006, in May 2022 Lilley was sentenced to 12 months' prison, suspended for 18 months, plus 100 hours of unpaid work.

Yet he failed to inform the FCA of his conviction, a breach of Principle 11 of the FCA's Principles for Business.

The FCA's statement said: "The facts and serious nature of Mr Lilley’s offence and conviction, in particular Mr Lilley having been convicted of a dishonesty offence involving fraud, shows he lacks honesty and integrity and is therefore not a fit and proper person to perform regulated activities.

The regulator added: "Taking into account the nature of Mr Lilley’s offence and the conviction arising from the offence, which was committed by Mr Lilley whilst an authorised person, the non-disclosure of his conviction to the authority and the consequent risk that he poses to consumers, the authority considers it is appropriate to prohibit Mr Lilley from performing any function in relation to any regulated activity carried on by an authorised person, exempt person or exempt professional firm."

Within the FCA's Principles for Business, Principle 11 (Relations with regulators) states that: “A firm must deal with its regulators in an open and cooperative way, and must disclose to the FCA appropriately anything relating to the firm of which that regulator would reasonably expect notice.”

And the FCA's 'Fit and Proper' test for employees and senior personnel sets out criteria used when assessing the fitness and propriety of a candidate for a controlled function, with the most important considerations being that person’s honesty, integrity and reputation.

In determining a person’s honesty, integrity and reputation, the FCA will have regard to all relevant matters including the seriousness and circumstances of any conviction for a criminal offence, even spent convictions, and whether the person is or has been the subject of any proceedings of a disciplinary or criminal nature, or has been notified of any potential proceedings or of any investigation which might lead to those proceedings.