Fare evasion and the FCAWhat it means for your fit and proper status

If you hold a senior management function, are a certified employee, or are otherwise an approved person under the Senior Managers and Certification Regime, and a letter has arrived about a fare you did not pay, the fear is immediate and specific: not the penalty, but your fit and proper status — and your ability to keep doing your job.

The honest position is more reassuring than the panic, and more urgent. For most people in financial services a minor transport matter is survivable. But whether it stays minor comes down to one decision the operator has not yet made — how to charge the case — and that decision can still be influenced.

Why the charge decides everything

A fare evasion allegation can be pursued in very different ways, and only one of them really engages the fit and proper test:

• Railway Byelaw 18 — the strict-liability offence of travelling without a valid ticket. There is no finding of dishonesty. For an approved person this is far less likely to be material to your fitness and propriety.
• Regulation of Railways Act 1889, section 5 — travelling with intent to avoid the fare. This requires intent and is more serious.
• Fraud Act 2006 — a dishonesty offence, such as using someone else’s railcard, Freedom Pass, Oyster or season ticket. The FCA fit and proper test centres on honesty, integrity and reputation, so a Fraud Act outcome is the one that most directly threatens your approval.

The difference between these is not the fare — it is the dishonesty. And whether the case is treated as dishonest is shaped at the operator’s letter stage, before any charge is finalised.

Pillar one: the operator’s letter stage is decisive

Before prosecuting, operators such as TfL usually send a verification or settlement letter. It is not an informal enquiry. It is where the operator decides whether to accept an out-of-court settlement — no conviction, no record — or to escalate to a Regulation of Railways Act or Fraud Act prosecution.

That makes it the single most important moment in your case. How you respond shapes whether the matter is treated as an honest mistake or as dishonesty. Because a dishonesty conviction is what most directly engages the fit and proper test, a specialist involved before you reply can influence the risk to your approval, not just argue mitigation afterwards. By the time of a conviction, that window has closed.

Pillar two: disclosure to your firm and the FCA

Under the SM&CR your firm must assess the fitness and propriety of approved and certified staff — typically at least once a year and whenever something changes — and the conduct rules require you to be open and cooperative. A criminal charge involving dishonesty is the kind of matter firms expect to be told about, and the firm may in turn have its own notification duties to the FCA.

Getting this judgement right is delicate, and the stakes are unusually high in financial services. Failing to disclose where you were obliged to can become a conduct issue in its own right — often treated more seriously than the underlying matter. But disclosing a case that was only ever going to be a byelaw fine can cause avoidable alarm with your firm. This is exactly the kind of decision that benefits from advice before you act.

The mistake that makes it worse

The instinct is to reply to the operator and explain. For someone under the SM&CR that instinct is dangerous: an unguarded written explanation can supply the very dishonesty evidence that turns a byelaw matter into a Fraud Act charge — and a dishonesty charge is what puts your approval in play.

What you should do now

Do not ignore the letter, but do not respond to it — or notify your firm — before you understand the allegation properly. The earlier you get advice, the more options remain open, including the possibility of keeping the case away from a dishonesty charge altogether.

Related guidance

• Fare evasion and your career (all professions)
• Fare evasion and the ICAEW / ACCA (accountants)
• Fare evasion and the SRA (solicitors and aspiring solicitors)
• When fare evasion becomes a criminal offence