Greg Kilminster
Head of Product - Content
FCA issues PS24/1 on motor finance complaints
The Financial Conduct Authority (FCA) has issued a policy statement (PS) 24/1 implementing temporary changes in handling rules for motor finance complaints.
Effective from 11 January 2024, the rule mandates a 37-week pause on firms’ requirement to provide a final response to a complaint related to motor finance agreements with discretionary commission arrangements (DCAs) within eight weeks of receiving the complaint.
This pause will apply to all complaints received by firms on or after 17 November 2023 and on or before 25 September 2024. The rules also extend the time for consumers to refer DCA complaints to the Financial Ombudsman from 6 to 15 months if the firm sent its final response within the time frame specified in the rules.
The FCA’s decision is a result of a significant number of reported complaints by customers to motor finance firms seeking compensation due to potentially unfair historical commission arrangements. During the pause, the FCA will review historical motor finance commission arrangements and sales across multiple firms and provide information on the next steps in Q3 2024.
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SAP fined for bribery offences
Global accounting software provider SAP will pay more than $220 million to resolve investigations by the U.S. Justice Department and the Securities and Exchange Commission (SEC) for violation of the Foreign Corrupt Practices Act (FCPA).
Under a three-year deferred prosecution agreement (DPA), SAP acknowledged conspiracies to violate anti-bribery and records provisions of the FCPA. The charges involve bribes to officials for government business. SAP will pay a $118.8 million criminal penalty, $103,396,765 in administrative forfeiture and monetary sanctions of nearly $100 million in disgorgement and prejudgment interest to settle the SEC’s charges
SAP’s obligations, under the Criminal Division’s Compensation Incentives and Clawbacks Pilot Program, include implementing compliance criteria in the company’s compensation and bonus system. The company’s commitment to withholding compensation from qualifying employees contributed to a reduction in the criminal penalty.
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UK Finance on AI regulations
UK Finance, the collective voice for the banking and finance industry in the UK, has published a helpful blog looking at key regulatory developments from 2023 in regard to the use of artificial intelligence (AI) in financial services and how AI regulation may develop over the coming year.
The blog references developments from the Competition and Markets Authority as well as the Financial Conduct Authority but notes various concerns raised during the last year regarding issues such as the risk of biased outputs, the opacity of AI systems, ‘hallucination’ risks, and risks of AI being used for bad purposes, such as ‘deepfakes’ or fraud.
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Washington State DFI requires crypto kiosks to warn users of scammers
The Washington State Department of Financial Institutions (DFI) has issued a policy statement requiring virtual currency kiosk operators (also known as Bitcoin ATMs or crypto kiosks) to provide consumers with a clear disclosure about the risks of using their services before initiating a transaction.
The disclosure must state that once money or virtual currency is sent to a scammer, there may be no recourse available. The aim is to alert consumers to the potential fraud in relation to these kiosks and encourage them to pause and consider why they are being asked to use a virtual currency kiosk before sending money to anyone.
Virtual currency kiosk operators must comply by 1 May 2024.
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