Financial Conduct Authority (FCA) Chair Charles Randell said the watchdog’s officials were too worried that challenging a company could lead to the regulator being sued.

“It’s absolutely clear in case after case, that where we have been averse to acting because of our perception of risk, we’ve ended up with a much bigger risk than we would have had if we had acted,” Randell told parliament’s Treasury Select Committee.

The FCA needs to act decisively and speedily to prevent consumer harm from fraud, even if it does not get it right each time, the FCA’s CEO Nikhil Rathi told the Treasury Select Committee, adding that fraud is Britain’s biggest crime.

The FCA is considering a much tougher gateway such as firms going through a “probationary” period initially before being granted authorisation to sell financial services, rather than getting “authorisation for life” from the start, Rathi said.

Simon Morris, a financial services partner at CMS law firm, said the FCA comments presage “a sharp and bolder approach to stopping firms that harm consumers”.

Current Bank of England Governor Andrew Bailey had been chief executive of the FCA when LCF collapsed in January 2019 leaving more than 11,000 investors with losses of up to 237 million pounds ($330.64 million).

LCF was regulated by the FCA but the mini-bonds it sold were unregulated and they have now been banned for sale to retail investors.