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Kind Consultancy’s 2025 Year in Review

It’s that time of year again – temperatures are down, the tinsel is up, and I’m looking back over a great 12 months at Kind Consultancy.

Big Changes

In March we moved across Lichfield into the state-of-the art new Shire House offices and we were immediately made to feel completely at home. I love it here and I know the team feels the same – for the excellent facilities, the friendly and helpful building staff and the sense of community with the other companies in the building.

Our team has grown and changed again this year – Hannah Prouse joined us in October and has slotted into the Consultancy team perfectly. She’s already doing great work and we’re excited to see what she achieves next year as she grows her desk.

Catherine Tieley has been off on maternity leave, and we’ve been very glad to see her and baby Zara visiting the office recently, it will be great to have her back with us in the new year.

Recruitment Success

I’m really proud of how the whole team has continued to push themselves and advance the business. Francesca Hopkins has overseen some very large-scale Complaints and Customer Service projects, managing complex processes and keeping dozens (and dozens!) of candidates updated, which is enormously impressive for her first year in recruitment.

Across the desk, Kiran Keshwala has been opening doors with International Banks and within the exciting FinTech space, keeping Kind Consultancy at the forefront of some of the most dynamic, fast-changing parts of the Financial Services landscape.

Training & Leadership

The training the team has received this year has been second-to-none, maintaining up to date industry knowledge and technical expertise to enable a truly consultative approach to our work on specialist roles.

In addition to this they have also received in-depth recruitment coaching from Stew Wilson with Retain Train Recruit , and it’s been great seeing them add new approaches and tools to their skillsets. All of this has been overseen by Lynsey Moore , my co-founder in the business, who has continued working hands-on with our biggest clients all while managing and leading the team.

Behind the Scenes

Our Operations and Compliance Manager Laura Kind has kept up with screening, documentation and agreements for more contractors than ever before thanks to the success of our Kind Agile Solutions offering, providing pre-screened top-tier specialist contract talent.

And last but by no means least, the Kind Group’s Senior Marketing Officer Miles Bradley has written and designed much of the great content you see on our LinkedIn page, the Kind Consultancy website and our other social media channels – and who started 2025 celebrating his 10th year here at Kind.

Giving Back

The whole team has made great contributions to our success this year – which in turn has enabled us to give back. Our programme with The Future Forest Company which plants a new tree for every permanent placement we make has resulted in over 200 new trees planted in the UK, with a few more to come before we close out the year.

We like to support a charity around this time every year, during the season of giving, and for December 2025 we’re supporting “Help to Make Tummies Full” project, delivering food to Financially struggling families in the West Midlands.

The Holidays and Beyond

Looking ahead to 2026, we have some exciting plans to into new areas, while continuing to offer the very best Governance, Risk, Compliance, Complaints and Financial Crime recruitment service in our space.

Every year we welcome new clients and candidates while working with many that we’ve known for a long time. So whether you’ve recently started following us, or have been here since day 1, we wish you a Merry Christmas and a Happy New Year.

I’d also like to take this opportunity to say thank you to everyone who works at Kind Consultancy – you’ve all made big impacts this year, driven the company from strength to strength and, perhaps most importantly, made the Kind office a fun and positive work environment.

That great team will be with you for all of your recruitment needs until close of play on December 23rd and then will be back, picking up calls and posting jobs on January 5th – I hope you all have a good break.

Failure to Prevent Fraud – What You Need to Know About ECCTA in 2025

ECCTA (the Economic Crime and Corporate Transparency Act) became law in 2023 – but one of it’s major components only came into effect in September of 2025.

Last month, “failure to prevent fraud” became a corporate criminal offence. This means that organisations will be held accountable if they profit from fraud committed by their employees or other associated persons, strengthening pre-existing fraud legislation and closing loopholes that have previously seen businesses escape prosecution. If found guilty, a business could face an unlimited fine.

Examples given by the government of situations where the law might be used include dishonest sales activities, hiding information from consumers or investors and deceitful practices involving financial markets.

What does the ECCTA “failure to prevent fraud” offence mean for Financial Services organisations?

First, let’s look at how we got here and the goals of the legislation –

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) was designed to “tackle economic crime and improve transparency over corporate entities”, following on from the Economic Crime (Transparency and Enforcement) 2022 Act (ECTE) which was more specifically focussed on overseas entities laundering money in the UK.

ECTA is much more wide-ranging, including reforms to how Companies House operates, additional powers to seize criminal crypto assets, changes to the rules around what information businesses share relating to money laundering and the removal of some previous reporting burdens that were deemed unnecessary.

One part of this suite of changes was the introduction of “failure to prevent fraud” as a corporate criminal offence for all ‘large organisations’ – incorporations, subsidiaries, not for profit organisations and public bodies that meet the Companies Act 2006 definition of a large organisation. To fall in scope an organisation must meet any two of the three criteria – having more than 250 employees, more than £36 million in turnover or more than £18 million in total assets. November 2024 saw the publication of full, detailed information on how businesses could prepare, giving them 10 months to make the necessary changes before the new offence came into effect on September 1st of this year.

The guidelines require all those organisations within the category to have “reasonable procedures in place to prevent fraud” and guidance from the Home Office set out six principles that should inform the relevant businesses’ fraud prevention frameworks :

  • Top level commitment – The board of directors and senior management need to be leading the way on preventing fraud and building an anti-fraud culture
  • Risk assessment – Organisations need to asses the “nature and extent” of their exposure to the risk of employees, agents and associated parties committing fraud, and the risk assessment should be documented and regularly reviewed.
  • Proportionate risk-based prevention procedures – Any given organisation’s work to prevent fraud will be different based on their specific risk exposure
  • Due diligence – Risk-based due diligence procedures should be applied to anyone who performs or will perform services for the business in order to mitigate fraud risks
  • Communication (including training) – Fraud prevention policies and procedures need to be communicated throughout the business, embedded in their culture and understood by staff at all levels, with training on these issues being crucial.
  • Monitoring and review – Businesses need to monitor and review their fraud detection and prevention procedures, revising and improving as needed.

They noted that these principles are “intended to be flexible and outcome-focussed, allowing for the huge variety of circumstances that relevant bodies find themselves in”.

What should organisations be focussing on right now to be ECCTA compliant?

In Financial Services, there is already a heightened awareness of fraud issues, and many firms will have adapted their previous anti-fraud work – fraud prevention is an FCA priority mentioned in their 2024/2025 report, so these are issues about which the sector is already on alert.

Still, every business needs to conduct thorough gap analysis, assessing and comparing current fraud protocols and controls against the guidance on the new law, identifying where current practices are not aligned or need revision.

From there, firms should be in a good position to map out what they need to do to ensure they are fulfilling the requirements – what exactly that looks like will be to unique to each business. Some may need to fundamentally alter fraud controls to account for fraud risks covered by the new law, others may need to enhance training, ensuring fraud awareness becomes a fundamental part of the company culture.

Whatever an organisation’s specific needs are, subsequent testing will be crucial to be confident that controls are effective and that you are fulfilling all of your commitments under the new rules, as will documenting all activity, both remedial and ongoing.

How can Kind help?

Kind Consultancy works with a number of best-in-field consultants with extensive expertise relating to Fraud, Economic Crime and Regulatory Transformation, some of whom are immediately available for new projects, including on ECCTA. Whether you’re considering bringing in an expert eye to review work you’ve already done, or you think you might need an interim to substantially redesign and rebuild your anti-fraud framework to be fit for purpose, contact Kind Consultancy via our website or on 0121 643 2100 for a confidential discussion.

The FCA and the DCAs: How We Got Here, What We Know and What Happens Next

Late on Friday afternoon, after the markets had closed for the weekend, the Supreme Court shared their judgement on three appeal cases involving Discretionary Commission Arrangements. These were cases where consumers alleged that car dealers who were motivated by commission payments linked to the total amount they paid burdened them with higher interest rates for their car finance, and failed to disclose it.

Before we look at the outcome of that decision, and what it means for the complaints landscape going forward, let’s step back for a moment – how did we get here?

The Discretionary Commission Arrangement Timeline

Our timeline starts all the way back in 2017, with the FCA investigating the Motor Finance sector, examining how well car finance was functioning and if customers were being treated fairly. This raised the issue of Discretionary Commission Arrangements, in which dealers were incentivised to charge consumers higher rates of interest. That spawned a specific investigation of DCAs in 2019, with a consultation opened in October of that year. With the information they had gathered, they announced in July of 2020 that DCAs were to be bannedfrom January 2021.

But all of that is really just the background to the situation that we’re now in. Jump ahead to January 2024 – after a period of time where an estimated 99% of complaints about historical DCAs had been rejected by firms, the Financial Ombudsman Service found in favour of complainants in two cases. This prompted the FCA to act, pausing all current complaints about motor finance while they investigated if customers should in fact be entitled to compensation in cases where their car loan had been subject to a DCA before the ban.

That investigation is complicated further by the Court of Appeal judgement in October 2024, which ruled that it had been unlawful for brokers to receive commission from lenders providing car finance without the customer being informed and giving their consent.

The lenders involved then took these three cases to the Supreme Court, which heard the cases in April of 2025 and delivered their judgement last week.

The Supreme Court Decision

As you’ve probably seen in news coverage, that judgement was not quite the clear cut end to the story some had expected. The court found in favour of the lenders in two cases, but sided with the consumer in the third. They declared that while the practice of commission had not been inherently unlawful, in that third case specifically the commission had been so high (55%) that it was a “powerful indication” that there was an unfair relationship.

The outcome consumers had been hoping for was all three cases finding in favour of the complainants, opening the floodgates for a widespread remediation programme in the mould of PPI where anyone who had been subject to a DCA could potentially claim compensation. There’s been a big push from Claims Management Companies to raise awareness around this issue and encourage consumers to complain, so we know there were a lot of these complaints already in motion long before the judgement arrived.

But we also did not see the outcome some people in industry had been hoping for – if all three cases had gone in favour of the lenders, that would send a strong message that they were not likely to need to compensate a large number of their past customers.

Instead we’ve arrived a situation where the question for lenders facing DCA complaints will be – was this specific commission arrangement unfair?

The FCA Response

The FCA moved quickly, publishing an announcement on Sundaythat they would consult on a proposed compensation scheme, with the consultation set to open in October.

The regulator will set out rules on how “lenders should consistently, efficiently and fairly decide whether someone is owed compensation and how much”. Factors that their statement identified as being key to assessing if an individual case is unfair included:

  • the size of the commission relative to the charge for credit
  • the nature of the commission, for example, whether it is discretionary
  • the characteristics of the consumer
  • compliance with regulatory rules
  • the extent and manner of disclosure

With those guiding principles, they will now look to create a redress scheme, clearly guiding firms on how to make those assessments and how much compensation needs to be made if the yet-to-be-defined criteria are met.

As they discussed back in June when they first put forward the notion that a compensation scheme might be necessary, the FCA has to balance a number of competing factors in creating the rules and guidelines. The considerations they have identified are:

  • comprehensiveness
  • fairness
  • certainty
  • simplicity and cost effectiveness
  • timeliness
  • transparency
  • market integrity

Some of these are of course going to be competing and conflicting, and the consultation will help them arrive at the right balance between all aspects.

Reactions So Far

With the ruling out and the consultation a few months away, we’re seeing a range of responses in the industry. Whilst most accept that there were some unfair arrangements, there are concerns about the cost burden on firms for compensation – especially if the FCA requires repayment of the full cost of commission, with some hoping that redress is instead calculated in terms of a difference between how much the customer paid and the standard market rate at the time.

“At the time” is a key phrase there because one fear that has been flagged is that this work is going to require a lot of historical data – and if the scheme allows for complaints from before the FCA became responsible for consumer credit in 2014, firms may find themselves looking for data that simply was not recorded as it was not yet required.

How Can You Prepare?

That means we’re almost certainly looking at a significant amount of work for motor finance firms in the near future, whatever version of a compensation scheme there ends up being. We work with a number of consultants who have subject matter expertise on both historical complaints and redress schemes, as well as our bench of complaint handlers that allows us to supply full teams to our clients for their projects. For organisations looking to automate the process, we can supply experienced administrators who have complaints knowledge and can help ensure cases are fully documented and being handled in a compliant manner.

For a confidential discussion about your complaints resource requirements and how Kind Consultancy might be able to help, contact us on 0121 643 2100 or via our website and follow Kind Consultancy on LinkedIn to keep up to date with our latest news, industry analysis and job postings.

Five Things You Need to Know About the Supreme Court’s DCAs Decision and the FCA Response

On Friday, after markets closed, the Supreme Court published their decision on three appeal cases concerning commission payments (Discretionary Commission Arrangements) made by lenders to car dealers. Here are five crucial takeaways you need to know:

  1. The Supreme Court sided with lenders in two out of the three cases, reversing the earlier rulings. The ruling says that “at no point did the dealer give any kind of express undertaking or assurance to the customer that in finding a suitable credit deal it was putting aside its own commercial interest as seller” – rebutting the earlier judgement which had suggested dealers had a fiduciary duty to put customers needs above their own.
  2. But the court did find in favour of the consumer in the “Johnson vs FirstRand Bank” case – they said that the 55% commission payment (based on the total charge including interest and fees) was so high that it was a “powerful indication” that there was an unfair relationship. They awarded the complainant the amount of commission plus interest.
  3. If all three cases had gone in favour of the consumers and the (now banned) practice of discretionary commission agreements was declared inherently unfair, there would potentially have been scope for a PPI-level compensation scheme. That scenario, which many were preparing for, is now ruled out. However, with the decision that very large commission agreements were “unfair” there will be many consumers who do qualify for some compensation.
  4. The FCA announced on Sunday that they will open a consultation by October on a compensation scheme, and that if that goes ahead the first payments will be made in 2026. That consultation will need to establish rules on which commission payments are and are not unfair and how much compensation should be paid.
  5. Right now, in these early stages, the FCA estimates that individual consumers will most likely receive less than £950 per agreement, and that the scheme will cost a total of somewhere between £9 billion and £18 billion.

We know a lot more than we did this time last week about the future of the motor finance complaints situation – but until the outcome of the October consultation and creation of the scheme and the related rules, there is still a lot of uncertainty.

For a confidential discussion about your organisation’s complaint handling resource needs, contact us on 0121 643 2100 or via our enquiry form.

Find out more about our work in the Complaints space here and for more background on Discretionary Commission Arrangements, read our past coverage here and follow Kind Consultancy on LinkedIn to stay up to date on all of our news.

FCA Considering “Possible” Motor Finance Consumer Redress Scheme

In a new statement published this morning, the FCA shared some of the considerations they are currently assessing for a “possible” Motor Finance Consumer Redress Scheme if the Supreme Court judgement concerning discretionary commission arrangements finds in favour of the effected consumers.

Recap: What’s happening with DCAs?

Prior to the 2021 ban on the practice, some motor finance lenders allowed car dealers to adjust the interest rates offered on financing deals provided to customers, with higher interest rates earning more commission for the broker. Subsequently there has been a large number of complaints from consumers who had not been aware of these arrangements, known as DCAs, and the majority of these complaints were rejected because they did not believe they had caused their customers any harm. In 2024 the Financial Ombudsman Service found in favour of the complainants in two cases generating a lot of publicity and in turn creating a further surge in complaints about DCAs.

Because of this, the FCA began an investigation into the past use of DCAs in January 2024. Meanwhile, the Court of Appeals found that in 3 cases where customers had not consented to or been given information about DCAs, the broker had behaved unlawfully. Those brokers then appealed to the Supreme Court, and a hearing took place in April 2025. A judgement is expected to arrive next month, July 2025.

What have the FCA announced? What would a potential redress scheme look like?

The FCA previously stated in March that “if, following the outcome of the Supreme Court judgment, we conclude motor finance consumers have lost out, it’s likely that we’ll consult on an industry-wide consumer redress scheme” . Their new statement suggests they are now preparing for this possibility following discussions with consumer groups, Motor Finance businesses and industry bodies.

The scheme would define rules for how businesses assess each claim and calculate the redress to be paid in cases where it is found to be due.  The key principles the FCA are considering in designing a redress scheme are:

  • Comprehensiveness
  • Fairness
  • Certainty
  • Simplicity & Cost Effectiveness
  • Timeliness
  • Transparency
  • and Market Integrity

Their statement notes that there would be tension between some of these principles and there would be a need to carefully consider and balance competing concerns. They also mention that they want the scheme to be easy to use and to be understood by consumers and to make it clear that there is no need to use a Claims Management Company or law firm.

The two models they are currently looking at are an Opt In scheme, where ” customers would have to confirm to their firm by a certain date that they wish to be included” or alternatively an Opt Out scheme, where “customers are automatically included”. The regulator notes that there are questions here on how easy the process is for consumers vs how much is required by the firms.

What comes next? How should you prepare?

Right now, it’s difficult to speculate on anything beyond the above information – the FCA have said that within 6 weeks of the Supreme Court judgement, they will announce if there will be a Redress Scheme and at that point they will lay out timings for a formal consultation process. That consultation would include a full proposal for how the scheme would work and draft rules including timings. Following that consultation, there would subsequently be final confirmation on if there will be a Redress Scheme and what the final rules are, including when to implement the scheme which today’s statement says they expect to be in 2026.

There are a lot of still unknown factors here – there is the initial Supreme Court judgement and then the FCA decision and then the consultation. At this point all that Motor Finance firms can do is make sure they are prepared for the range of possible outcomes.

Over the last 5 years, Kind Consultancy has supported multiple Motor Finance organisations of all sizes including global brands in Complaint Handling, QA and Complaint Administrative needs.  If you’re interested in a confidential discussion about your Complaint Handling and Redress resource needs, our Kind Agile Solution offering may be able to help – contact us for a conversation on 0121 643 2100 or via info@kindconsultancy.com

Closing the Financial Crime Skills Gap

Last month the FCA published their Annual Report and Accounts for the 2023 – 2024 Financial Year. That report included the statistic that the previous year had seen their highest ever number of Financial Crime charges in one year, a long with a number of prosecutions, freezing orders and fines for businesses with “serious financial crime control failings”. The report highlights that since April of 2023, the regulator has published 5 reviews of different business’s Financial Crime controls, with the aim of sharing and encouraging best practices.

We’ve also recently seen the high profile case of the FCA fining Starling Bank over £28,000,000 for “shockingly lax” Financial Crime controls. The issues identified included a reliance on an automated system that was not screening new or existing customers against the full list that should have been used – and discovery of this led to a wider review of their Financial Crime systems which revealed issues with other policies and procedures, failures in the testing of screening systems and inadequate management information for alerts.

The Financial Crime Challenges Facing the Industry

This is a major area of regulatory activity right now, and the rise in the number of Authorised Push Payment Fraud cases and subsequent press coverage and public awareness of fraud is sure to make it a key issue for consumers too. The front line of Financial Crime defence that those consumers will encounter are CDD, EDD and AML staff. Technological developments over the last decade have seen a lot of the customer onboarding process going completely digital, which is of course a positive for many consumers and allows firms to deliver products faster than ever in a streamlined experience, but has created new difficulties too. Protecting your firm and in turn your reputation and your customers from Financial Crime is now a rapidly evolving race against the creation of new fraud approaches utilising different methods and technology. Some businesses are experiencing a skills gap, with their teams struggling to keep up with new fraud techniques and new regulatory standards. Investing in talented, well-trained front-line CDD, EDD and AML professionals could make all the difference.

One area where industry contacts have expressed concern to me is OSINT. OSINT is an acronym for Open-Source Intelligence, and within Financial Crime it refers to making use of publicly available data, gathering insights and identifying connections to investigate individuals and transactions. Even though OSINT utilises information that is open to the public, knowing how to find the right data and how to analyse it is a complex, specialist skill set.

What data is available is also continually shifting as new technology and people’s usage of online services changes. New tech is also leveraged by banks and Financial Services firms, with more and more organisations in recent years automating large parts of their new customer onboarding processes. This has clear upsides, enabling businesses to remotely onboard customers without a need for people to visit branches, opening up access to many more potential consumers – but it also creates problems, like those seen in the Starling case.

Automation Trouble and the Need for Refresh

Where automation is part of onboarding new customers, risks arise when that information is not being properly scrutinised by experts. A number of firms are now facing difficulties arising from a lack of Refresh projects. Large organisations especially need to regularly review existing customers, looking at the EDD from their onboarding and checking against current details. When Refresh projects aren’t happening, serious problems can arise – for example, a business account may be onboarded with a set of directors who pass screening, but later on they add a new director to the board who would not. If details aren’t being checked and updated, the firm has no way of knowing about these potential points of Financial Crime risk, and cannot act to mitigate them. KYC is a core element of bringing a new customer into a business, but how much can you claim to really Know Your Customer if you’re not updating your knowledge of them and their accounts over time?

In order to have a truthful, up-to-date picture of an organisation’s current customers, regular Refresh is needed. This is an area where the skills gap becomes evident – Financial Crime Managers and KYC/EDD Analysts can only work with the data they have access to. They can’t be effective if that data is incomplete or out of date. OSINT skills are crucial here, and a business needs to be able to trust these staff to think outside the box, recognise where they’re working with legacy data, and go and find accurate, current information.

How Can Kind Consultancy Help?

Kind Consultancy have extensive experience of recruiting Financial Crime specialists at all levels of seniority, providing Head of Financial Crime interims, permanent AML Managers and whole teams of contract KYC staff for Financial Services organisations across the UK and abroad, and we will continue to do so.

We also have a new way to help your business stay safe – a unique partnership with the Greater Chatwell Academy of Learning, offering a suite of digitally delivered online e-learning courses in Financial Crime, available through Kind Consultancy. This programme includes training on Managing Tax Evasion Risks, Managing Sanctions and Sanctions Evasion Risks, Managing Fraud Risks, Data Protection, AML Risk Management, Whistleblowing and Introductions to Financial Crime Compliance and Anti-Bribery and Corruption. We also offer a dedicated, specialist OSINT course.

This is great for candidates looking to sharpen their Financial Crime tools and update their knowledge, but it’s also an excellent opportunity for employers. Kind can work with you to tailor a package to have your existing Financial Crime staff undergo this training, which on completion will see them awarded a certificate in association with the University of Gloucester, giving you the assurance that they will be equipped to respond appropriately to threats and potential risks when they encounter them.

To find out more, head to https://www.kindconsultancy.com/services/learning-development/ or contact me on 0121 643 2100 or lynsey@kindconsultancy.com to discuss bespoke training packages, and help your business to stay safe.

Kind Consultancy announce new Learning & Development Partnership with Great Chatwell Academy of Learning

Kind Consultancy is very pleased to continue delivering an offering above and beyond the traditional recruitment experience by partnering with Great Chatwell Academy of Learning to provide a suite of digital Financial Crime education courses to our candidates – completion of which grants a certificate awarded in association with the University of Gloucestershire.

We have always worked to enhance our candidate’s career prospects and for a long time now have wanted to add an education element to our work, allowing the niche Financial Services specialists we work with to directly upskill their knowledge, and we’ve found the perfect partner to deliver this in Great Chatwell Academy of Learning. Just as Kind’s senior leadership team is made up entirely of professionals with direct experience in Financial Services, Great Chatwell Academy of Learning was founded by senior Risk and Compliance professionals, true subject matter experts who we trust to deliver first class training.

The course package available exclusively through Kind Consultancy covers Managing Tax Evasion Risks, Managed Sanctions and Sanctions Evasion Risks, Managing Fraud Risks, Data Protection, AML Risk Management, Whistleblowing, and Introductions to Anti-Bribery and Corruption and Financial Crime Compliance. Each topic has it’s own e-learning package that can be accessed anywhere at any time, allowing busy Financial Crime professionals to work toward the certification at times that suit them. We also encourage candidates looking to get the edge in a competitive market to consider GCAL’s OSINT training course, which you can also find linked on our new Learning & Development page.

Financial Crime staff are the frontline of defence for Financial Service’s firms and their customers. Having the right skills and the most up-to-date understanding of the threats facing the FS world today can make all the difference – to you, to your employer, and to your future career prospects.

For candidates who want to enrich and update their knowledge, and gain a certification that gives their CV a distinct advantage, register today here.

To watch a video discussion between Kind Consultancy’s Lynsey Moore and Great Chatwell Academy of Learning’s Lee Byrne about the origins, goals and content of the collaboration, click here.

For clients interested in upskilling their existing Financial Crime teams, get in touch with us on info@kindconsultancy.com or 0121 643 2100.

We’ll be talking more in the coming weeks about this exciting new collaboration and it’s value – keep an eye out on our LinkedIn for more details soon.

Focus On Financial Crime

Earlier this month the FCA issued a Dear CEO letter arising from a number of recent assessments of how well Annex 1 firms are complying with Financial Crime regulations. “Annex 1” refers to a group of businesses who engage in activities that require them to be supervised by the FCA specifically in relation to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations of 2017 (often referred to as MLRs) – even though they are may not otherwise be regulated by the FCA.

The letter raised concerns that they were seeing similar, repeated failures when they were looking at these firms, with recurrent problems including “discrepancies between firms’ registered and actual activities, financial crime controls which had not kept pace with business growth, a failure to risk assess their own or their customers’ activities properly and inadequate resourcing and oversight of financial crime issues and requirements”. The letter goes on to set out the regulators expectations of what happens next: recipients will need to complete a gap analysis against each of the key problems highlighted within the next six months, and then quickly work to close any identified gaps and share the analysis across the firm.

If your firm is affected, Kind Consultancy can help. We are Governance, Risk and Compliance specialists with a track record of successfully helping Financial Services businesses with their Financial Crime needs. Let’s dig in on some of the specific issues the regulator is looking at and set out how Kind can assist.

  1. “Lack of Financial Crime controls to keep pace with business growth”.

The Dear CEO letter cites multiple cases where “Financial Crime policies, controls and procedures have not kept pace with the size and complexity of the business”. This also speaks to a lack of engagement from senior management on Financial Crime issues – these factors aren’t being thought about at every stage of expansion.

  • Kind have worked with a number of businesses engaging in rapid expansion, including newly funded start-ups through to established international businesses moving into new territories, and we are well versed in running robust search and selection campaigns in tight timeframes for Financial Crime projects where we have sourced top talent across all levels of seniority – and have deployed interim teams at short where an Interim Manager or contract team are needed immediately while a permanent person is found.

2. “Business Wide Risk Assessments (BWRA)”

The FCA notes that in some firms they looked at the BWRA was “completely absent” and in others, a BWRA was completed but “the quality [was] poor”, lacking detail and clarity. In some cases, there was a failure to identify Money Laundering, Terrorist Financing and Proliferation Financing failures. Firms should be revising and updating their BWRAs to ensure compliance with MLROs and to reduce the risk of Financial Crime.

  • Kind can supply organisations with an independent “Critical Friend” to complete an in-depth business wide risk assessment, giving you a clear view of all the risks your firm is exposed to and, if desired, helping to or taking the lead on designing the controls and changes needed to mitigate the identified exposures.

3. “Due Diligence, Ongoing Monitoring and Policies & Procedures”

The firms assessed were found by the regulator to have Customer/Client Due Diligence and Ongoing Monitoring policies and procedures that were vague and lacking in detail, creating ambiguity around the actions that staff should be taking. In some cases, there was insufficient guidance on when customers should be subject to the regular Customer Due Diligence (CDD) process or the Enhanced Due Diligence (EDD) process.

  • Kind has a very strong track record of supplying top-tier Governance talent to Financial Services firms of all kinds and sizes to rewrite and upgrade these policies – and to then help embed them in the business, ensuring genuine understanding and buy-in from all staff.
  • Kind has previously deployed large-scale teams of KYC and EDD analysts to carry out due diligence on New to Bank Clients and Existing Clients that have become high risk as part of a Refresh project for a major international bank.

4. “Governance, MI and Training”

The FCA findings cite multiple firms having under-resourced Financial Crime divisions and a lack of proper training on Financial Crime issues for staff. Some organisations were not providing role specific training, some were missing key topics and some staff were found to have generally very low levels of Financial Crime awareness.

  • Kind Consultancy works with multiple Financial Crime experts who have run tailored, large-scale training programmes for Challenger Banks, Consumer Credit firms and other Financial Services businesses who had identified a lack of Financial Crime awareness. Our experts will operate on-site with your staff, delivering a detailed Financial Crime training programme covering everything employees need to know in order to excel at all aspects of their job with Financial Crime exposure. We’ll be happy to customise all aspects of training to fit your specific organisation’s products, business model and size.
  • In terms of under-resourced teams, Kind is perfectly positioned to help with this. Financial Crime recruitment has been a core activity for us since our inception, and we have an extensive database of some of the best Financial Crime talent in the industry, at all levels of seniority. Whatever aspect of your Financial Crime team needs to raise headcount, Kind will be able to quickly find the best possible candidates to fill the gap. Through our vast network and skill set we can apply a mixed methodology to go out and identify the very best talent for your role that is inaccessible through traditional recruitment, making a confidential approach to head hunt the best possible people.

5. “Absence of a clear audit trail for Financial Crime related decision-making”

Finally, the last identified weaknesses were around audit. Some of this concerned changes that existing Senior Management need to make, but it also highlighted that some large firms had failed to “establish an independent audit function” and they expected such a function to “examine and evaluate the adequacy and effectiveness of the [Financial Crime] policies, controls and procedures adopted”.

  • This is an area Kind can assist with – we have helped multiple clients both by creating permanent Internal Audit teams and by supplying trusted contract expertise to run Audit projects, giving organisations a detailed breakdown of how all aspects of their Financial Crime work is operating.

Financial Crime Case Studies

AML & CTF Training

Recently we were approached by a challenger bank to provide training for their Operations and Senior Management team on Anti Money Laundering and Counter-Terrorism Financing. We connected them to one of the most trusted Financial Crime SMEs on our Agile bench, and together we put together an intensive training programme. The training covered a wide array of Financial Crime topics, building up the client’s understanding and then explaining their specific responsibilities relating to each issue. The client was very pleased with the training, and has retained us to regularly provide training to their organisation, with the content continually enhanced to incorporate new regulations and developments.

Financial Crime SMEs

We have also worked with a Retail Bank who we supplied with a team of Financial Crime SMEs (Subject Matter Experts) to carry out Enhanced Due Diligence on new clients who had been red flagged by the front line team. Our team then assessed the legitimacy of the customer, either giving the go-ahead to onboard the client, escalating internally or in the most extreme cases, raise with external agencies and offboard the client.

S166 – KYCs

We were contacted by a large global retail bank who had been issued a Section 166 notice in their UK operation. We deployed 35 KYC analysts to carry out Enhanced Due Diligence on existing customers to identify gaps within the KYC process. This was then fed back to the organisation, and Financial Crime SMEs were brought in to improve existing controls and frameworks and rewrite policies. Kind then introduced Trainers to the business to upskill permanent members of staff and ensure that BAU operations were of a high quality.

International KYC & AML Project

As a final example of recent Financial Crime work, we worked with clients further afield looking to tap similar UK Compliance expertise. One of our clients, a multinational bank, had suffered a serious Financial Crime failure in one of their European divisions and wanted to bring in trusted KYC and AML resource from the UK for a large scale project identifying and addressing the gaps. With pre-screened, pre-qualified contractors who were part of our Kind Agile Solutions bench, we were able to quickly put forward a large team of seasoned KYC and AML experts and have them at work fast. Many of that team would go on to be permanently retained by the business as they were so pleased with the work, and the client has not faced any subsequent public Compliance issues.

Talk to Kind

Even if your firm is not part of the Annex 1 group, this is a good reminder that the FCA is very focussed on Financial Crime right now, and “inadequate resourcing and oversight of financial crime issues and requirements” is something all Financial Services businesses should be wary of, taking preventative measures as part of a pro-active approach. From 2021 to 2022 the total value of fines issued by the FCA came to over £600,000,000 and over two thirds of those were related to Financial Crime and AML. This is an ongoing focus area for the regulator across all of Financial Services, and no organisation can afford not to take it seriously – for example, the Dear CEO letter of May 2021 similarly highlighted Financial Crime and AML framework failings in retail banks, asking them to undertake comparable gap analysis exercises and mitigate identified weaknesses. The message is clear that regardless of what part of the Financial Services landscape you’re operating in, this needs to be a top regulatory priority.

For a confidential conversation about how Kind Consultancy can help, get in touch on 0121 643 2100 or via lynsey@kindconsultancy.com

Discretionary Commission Arrangements: Key Preparations

What’s Happening With DCA’s in 2024?

Motor Finance compliance developments rarely make the mainstream press. When they do – you know something big is going on. What’s happening with the FCA and Discretionary Commission Arrangements in 2024? Are we about to see the biggest complaints landscape upheaval since PPI? Here’s everything you need to know.

January 11th, 2024 – The FCA Statement

On the second Thursday of the year, the FCA released a statement titled “FCA to undertake work in the motor finance market”. The statement begins by summarising the 2021 ban on discretionary commission arrangements, removing an incentive for brokers to raise the interest rate a customer would pay on their car finance. The regulator noted that subsequently there had been a large quantity of complaints from customers who believed they had received commission-motivated higher interest rates before the ban.

The majority of these complaints have been rejected by motor finance firms who do not believe they have acted unfairly – but the Financial Ombudsman Service has reviewed some of these complaints and found in favour of the customer. They expect this to lead to a rise in the volume of these complaints.

In reaction to all of this, the FCA announced in their statement that they would be conducting a review of “historical motor finance commission arrangements and sales across several firms.”

What’s Happening Now?

The FCA review will look to establish if there has been “widespread” misconduct causing detriment to consumers. If that’s the case, the next move will be to decide how these complainants can receive “appropriate settlement[s] in an orderly, consistent and efficient way”. One immediate effect of this is that the regular 8-week deadline for resolving motor finance complaints has been paused for 37 weeks – specifically in cases where “there was a discretionary commission arrangement between the lender and the broker”.

The pause is backdated to apply to complaints received on or after November 17th of 2023, and will apply to complaints received up to and including the 25th of September 2024. On the customer side, the 6-month period to refer complaints to the Financial Ombudsman Service is being temporarily extended to 15 months.

What Happens Next?

The FCA statement includes the intention to announce next steps in the third quarter of 2024.

At present we can only speculate about what those next steps will be. How the regulator response plays out will depend entirely on what the review finds – how widespread discretionary commission arrangements were and how severely they were impacting consumers. It’s possible that this will then become a PPI style high-profile mini-industry within the complaints world, requiring significant investment from motor finance organisations both in terms of compensation and complaints resource. Given press coverage, regardless of their decision, it is near certain that we will see an increase in complaints as more consumers become aware of the situation and the possibility they will have been affected.

Another factor to consider when predicting how this will play out is the Financial Ombudsman Service’s plans for the year. Their annual plan consultation opened in December includes the possibility of them beginning to charge “professional representatives” – introducing a cost to CMCs bringing claims against Financial Services firms. That consultation closes on January 30th with the Ombudsman’s finalised plan and budget for the year set to be published on March 31st. Depending on what they decide and how large the fees are, that could seriously disincentivise large scale CMC activity on this issue regardless of the FCA decision.

What Should Motor Finance Businesses Do?

Motor Finance firms should be considering all of your current capabilities that could be effected – we could be dealing with complaints dating back as far as April 2007, think about how far back you might need to go and what data you can utilise. What do your current processes relating to DCA’s look like? What do you have in place for customers in scope? How will you defend CMC activity? What forecasts do you have in place in terms of budgeting for redress?

Earlier this week we put together some Frequently Asked Questions and Answers on the issue of Discretionary Commission Agreements, click here to read those in full.

The FCA’s “Temporary changes to handling rules for motor finance complaints” webinar today made it clear that the regulator expect firms to continue resolving all the complaints that they can and that the current extended timelines shouldn’t be treated as a total freeze – once the pause ends, complaints will be picked up at the point they were frozen so, for example, a complaint that had been with the firm for 3 weeks when the pause came into effect will need to be resolved within 3 weeks after September 25th. Right now, we would recommend motor finance firms continue responding to complaints wherever possible and start to plan ahead, carefully considering their complaints capacity.

There are some key factors to think about in terms of Complaints planning specifically. In situations where an organisation does not still hold all of the documentation relating to a complaint and the firm will be expected to conduct a full investigation and gather whatever documentation they can, examining what documentation they can retrieve from the customer and from the lender or any other parties involved.

There are also no plans at present to release any fixed templates how complaint responses. All of which paints a picture of a very involved, investigative complaints process, requiring trained, experienced and knowledgeable complaints professionals – and, depending on the FCA decisions we see later in the year, possibly a large number of them.

Kind Consultancy is currently supporting a number of Motor Finance firms in relation to DCAs, from ringfenced project teams to flexible complaints resource. For a confidential discussion about how we may able to assist your organisation, get in touch on 01216432100 or via selena@kindconsultancy.com – or you can find out more about our Kind Agile Solutions contract resource offering here

Kind Consultancy nominated for “Lichfield Small Business of the Year”

We’re very proud to announce that we have been shortlisted for the “Lichfield Small Business of the Year” award at the 2024 Royal Sutton Coldfield, Lichfield & Tamworth and Cannock Chase Chamber of Commerce Awards.

We’ve had a fantastic year and it’s great to be recognised like this – we’ll see you all at the awards show in January.

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