As a result of an investigation by the UK's Financial Conduct Authority, Mr Dharam Prakash Gopee has appeared at Westminster Magistrates Court charged with offences under the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000.

The carrying-out of unauthorised business is an offence punishable by up to two years in prison or a fine or both. The FCA is alleging that Gopee operated as an unlicensed consumer credit lender and that he conducted regulated activity without authorisation over a numbers of years by signing and administering regulated credit agreements as a lender. This type of financial service was licensed by the Office of Fair Trading until 1 April 2014, when the FCA took it over. This is the first time that the FCA has taken criminal action in a case related to the powers it wields over consumer credit operators.

Gopee acted as a 'lender of last resort' and supposedly dealt with consumers who were often in difficult circumstances. He regularly registered charges over the homes of borrowers to enable him to take possession of those properties if the borrowers failed to pay off their debts. He is believed to have lent in excess of £1 million over the last four years, while neither in possession of a consumer credit licence from the OFT, nor an equivalent document from the FCA.

The case against Gopee was sent to Southwark Crown Court for trial and a 'plea and trial preparation hearing' is provisionally listed to be heard on 14 February. The defendant was disqualified as a director on 5 May 2016 for 15 years, the maximum period of disqualification, due to the liquidation of Barons Finance Ltd.

Any consumer who deals with an unauthorised firm will not be covered for his losses by the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.