🔍 When the Regulator Loses Its Nerve

“Even where powers exist to intervene, the FCA frequently loses its bottle, preferring to pass the matter to the Financial Ombudsman Service rather than confront major firms directly.” — Meridian Legal Services

I wish this quote didn’t ring so true.

After months of correspondence, Stripe has admitted that small-business funding on its FCA-regulated platform was mis-sold as “not a loan.” Yet when I reported this to the FCA, the response was simply that business lending sits “outside their remit” and I should contact the Ombudsman instead.

A regulated platform promotes a financial product incorrectly.
An unregulated lender enforces it like a loan.
And the regulator that licensed the platform says, “not our problem.”

This isn’t an isolated glitch — it’s a perimeter gap that leaves thousands of small firms exposed. The FCA has the power to act on misleading financial promotions, but too often it passes the buck rather than protect the public.

Regulation isn’t just about rules; it’s about courage.
If the system can’t stand up to its own licensees, who is it really protecting?

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🧩 Inside the Perimeter Gap: How Stripe and YouLend Exploit a Loophole

That’s how the FCA often passes responsibility to the Ombudsman instead of using its own powers.
Here’s what that looks like in practice.

1️⃣ The Sale:
Stripe’s dashboard promoted a Merchant Cash Advance — “not a loan” — with repayments of 25% of daily sales.

2️⃣ The Reality:
The contract issued by YouLend was a Loan Advance Agreement with a personal guarantee and a fixed weekly minimum repayment.

3️⃣ The Enforcement:
YouLend later threatened third-party debt collection when those fixed minimums weren’t met, even though Stripe continued to deduct 25% of revenues automatically.

4️⃣ The Systemic Issue:
Stripe admits the “not a loan” wording was a technical error affecting multiple users.
Yet because the loan is classified as “commercial”, the FCA says it’s outside its remit — even though the misleading promotion appeared on Stripe’s FCA-regulated platform.

So the platform that caused the misunderstanding is regulated.
The lender that enforces the harm is not.
And the regulator stands between them, saying nothing.

That’s the perimeter gap — where accountability falls through the cracks and small businesses pay the price.

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🧭 Closing the Perimeter Gap: A Blueprint for Fair Finance

I’ve been highlighting how the FCA’s perimeter gap leaves small businesses exposed.
It’s a simple story with complex consequences:

• A regulated platform promotes a product incorrectly.
• An unregulated lender enforces it unfairly.
• And the regulator watches from the sidelines.

But criticism alone won’t fix it. Here’s what would.

1️⃣ Transparent Promotion Rules
If a financial product is sold on a regulated platform, it should be regulated as such. No more hiding behind “commercial lending” loopholes.

2️⃣ Joint Responsibility
Where two firms collaborate — one authorised (Stripe), one not (YouLend) — both should share accountability for how customers are treated.

3️⃣ Data Accuracy as a Duty
Inaccurate arrears data, threatening messages, and automated systems that misstate repayments should be treated as breaches of Consumer Duty and GDPR fairness principles.

4️⃣ Empower the Whistleblowers
The FCA must engage with informed evidence, not bury it under “outside remit” disclaimers. Early warnings should lead to early interventions.

Small businesses deserve a regulator that protects them before harm occurs, not after.
We can build a financial system where transparency replaces complexity and accountability replaces avoidance — if we have the courage to close the gap.

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About Get SAFE

Get SAFE (Support After Financial Exploitation) was born from a simple truth: too many victims of financial abuse are left to suffer in silence.

We exist in memory of Ian Davis—for the ones who did everything right, only to be failed by the systems they trusted. We know that behind every vanished pension, every ignored complaint, and every stonewalled letter is a person—frightened, exhausted, and too often alone.

Get SAFE offers more than sympathy. We offer structure, support, and solidarity.
We provide a voice where there’s been silence, and clarity where there’s been confusion.
We stand beside those who have been exploited, not just to help them recover—but to help them reclaim their story and rebuild their future.

Because financial justice is not a luxury.
It’s a human right.

If you or someone you know has been affected by financial exploitation, we are here.
You are not alone.

 Learn more at: Get SAFE (Support After Financial Exploitation).