TTF Blog: 05 October 2020

TTF leading calls for a 'violation tracker' in the UK

CIty of London; Pic by Colin & Kim Hansen

by Alex Varley-Winter, TTF’s Head of Media Relations & Investigative Reporting

Tracking fines issued by regulators is one way to measure ‘recidivism’ – when a company is repeatedly fined for committing the same offence again over the years.

In the United Kingdom, fraud, bribery and other economic crime can be dealt with via ‘Deferred Prosecution Agreements’ overseen by a judge.  Fines are also levied by other regulators in fully prosecuted cases. For example, this dataset by the Environment Agency shows they have issued just over £98 million in fines since the year 2000.

Violation Tracker (VT) is a powerful tool used in the United States to keep tabs on all fines across all industries. Transparency Task Force is launching a campaign to bring it to the United Kingdom.

Using the existing database, for the United States, you can see, for example:

  • that fines for financial offenses since the year 2000 have totalled $305,457,241,721, and that JP Morgan Chase tops that list.
  • that there have been just over $96billion of fines in the United States for environmental offenses largely to oil companies, with BP, British Petroleum, having paid-out the most, $27,827,796,980 covering 142 separate violations over the last twenty years.
  • that Wells Fargo topped VT’s bill in fines for ‘fraud’ due to $3billion levied on the bank in a single penalty this year.
  • that Facebook tops VT’s bill for consumer-protection-related offenses paying $5,002,450,000 in fines for just two offenses.

TTF’s founder Andy Agathangelou told Reaction‘s Maggie Pagano last week: “Wherever you are on the political spectrum – capitalist or socialist – we need properly functioning and transparent markets. It’s particularly important for those supporting free markets as they need to ensure that capitalism is doing what it is designed to do, and not to be distorted by the bad behaviour of big corporations.”

Andy’s expertise resides in the pensions industry, and he was instrumental in campaigning for Parliament’s current inquiry on pension scams He explains: “The [pensions] industry has been let down by the poor behaviour of a few people and organisations, which has tarnished reputation for the industry as a whole. It’s important that trust is restored.”

One key arm of accountability is to make sure that fully compliant and purpose-led companies are transparently visible, and also that bad behaviour is visible and trackable. We see the value of transparent accountability not only in financial services, but across all industries.

In the United States, Violation Tracker has been used by NGOs, journalists and regulators themselves – Greg LeRoy, who launched the project there five years ago, explains that: “Environmental Protection Agency staffers were heavy users of Violation Tracker” and that Occupational Safety and Health Administration staffers were ‘directly trained’ to use the tool, by recommendation of President Obama’s OSHA director, because: ‘our parent-subsidiary matching system makes our version of the data more useful than the original agency data in identifying ultimate corporate recidivists’.

All these examples have led us to believe that Violation Tracker can be a valuable resource in the United Kingdom and elsewhere. We are running a live interview with Greg LeRoy, who created the tool in the United States, tomorrow evening and are inviting press and any interested NGOs to attend.

New FCA chief Nikhil Rathi urged to confront Google over scam ads

Mark Taber, one of our members, has been campaigning publicly against Scam Ads being promoted on Google search since at least February 8th. He elevated this issue over the weekend with The Times who have launched an investigation into the issue.

Key among Mark Taber’s campaigning objectives is that Regulators do much more using existing laws’: “For example prosecuting advertisers for FSMA s21 criminal offences.

In response to the Times, it appears the Financial Conduct Authority blamed Google, and Google blamed the Financial Conduct Authority. On Twitter, Mr Taber is now openly appealing to the FCA’s new chief Nikhil Rathi to organise a meeting and confront the issue.

TTF propose ‘Joint Task-Force’ on scams to MPs

MPs on the Work and Pensions Select Committee asked TTF to write to them to outline a proposal for a ‘joint task force’ against pension scams, during our evidence to them on the 16th. Today we are finalising that document. Here’s a sneak preview on a couple of points:

What’s wrong with Project Bloom?

“We think that is a very good question that warrants a paper all its own. However, for the purpose of this discussion paper we will merely state that Project Bloom:

  • Does not involve all the relevant stakeholders and is therefore incomplete
  • Is too high-level to be effective – it does not operate “on the ground,” dealing with real cases on a daily basis
  • It should not be confused with the Joint Task Force initiative. If the Joint Task Force were a car, then Project Bloom would be a drawing of a car.
A team properly staffed from each watchdog, to ‘triage’ reports of scams

“What we are proposing is a permanently staffed, co-located, working group, comprising representatives from each agency, with clear reporting and communication lines and accountability.

“It would receive and triage incoming reports of scams and … would task a newly created operational team that includes a representative from each agency that could be relevant to the specifics of that particular case.

“The benefits of this approach is that it is both lean and agile, able to respond quickly and appropriately with a highly skilled, cognitively diverse and right-sized team to every credible report of consumer harm.”

Full accountability to the public on financial crime

“There is a need for better accountability and transparency in all investigations and complaints against scam perpetrators and the regulators themselves, to:

  • Show the public what is being done & what is being put right
  • Show how successful or otherwise the Regulators are in catching perpetrators, the funds recovered and what is returned to victims 
  • Provide an annual report that includes disclosure of expenditure and investigations and published full accounts of pension schemes

To put it bluntly, it is very difficult to understand how the regulators can confidently believe they will solve the problem with the current approach.”

We intend to publish our proposal in full soon. As this has been specifically drafted for MPs on the pension scams inquiry, it is likely they will  also make it available on Parliament’s website.

Press Timeline of relevant articles:

 
28 Sep 2020 – PM urged to show leadership in fight against scams by Amy Austin for FT Adviser
 
28 Sep 2020TTF calls for govt leadership on pension scams following meeting with PM by Sophie Smith for Pensions Age
 
26 Sep 2020 – £60m revamp for Action Fraud hotline that failed victims by Martin Beckford for The Sunday Times
 
25 Sep 2020 – FCA labels Google’s scam advert efforts ‘deeply frustrating’ by Rachel Mortimer for FT Adviser
 
 
20 Sep 2020 – Explore the FinCEN Files Data and Suspicious activity reports, explained by the International Consortium of Investigative Journalists (ICIJ); Fergus Shiel and Ben Hallman
 
21 Sep 2020 Flood of complaints expected over Covid-19 UK business loans, by Kalyeena Makortoff for the Guardian
 
16 Sep 2020 – Regulators Accused of Ignoring Scam Warnings by Jack Gray for Pensions Age
 
16 Sep 2020Tougher clampdown on pension scams is needed, MPs told by Vicky Shaw for Belfast Telegraph
 
 
11 Sep 2020 – ‘Delay changes to Watchdog Complaints Scheme’ by James Hurley for The Times
 
 
03 Sep 2020Regulators have not yet got to grips with how to close down crooks, warns TTF  by Hope William-Smith for Professional Pensions
 

24 Aug 2020Financial Conduct Authority rushes to minimise compensation for its failings by James Hurley for The Times

04 Aug 2020Have your say: Will the WPC’s inquiry into the impact of pension freedoms be too overshadowed by Covid-19 impacts? by Professional Pensions

03 Aug 2020 – ‘“I’m 39, have lost my job and am in debt – can I unlock my £18k pension?” … DON’T do it!’‘ by Steve Webb for This is Money

01 Aug 2020‘I lost £2.3m after I was conned into transferring my pension’ by Jessica Beard for the Telegraph

31 Jul 2020 ‘Common sense’ prevails as pension freedom withdrawals fall 17% — But drop is expected to be ‘a short-term blip’ by Robbie Lawther for International Adviser

31 Jul 2020HMRC figures show plunging pension freedom withdrawals by Hope William-Smith for Professional Adviser

28 Jul 2020MPs launch inquiry into pension scams  by Tom Kelly for Daily MailUK Pension Scams Under Scrutiny After 2015 Relaxation in Rules by Reuters & MPs launch wide-ranging pension scams probe by Justin Cash for MoneyMarketing

24 Jul 2020 – US business groups seek steps to stamp out online fraud by Leonie Barrie for Just Style

22 Jul 2020Pension scams increase amid lockdown by Sophie Smith for Pensions Age & Missed Opportunity to Use Victims in Scam Work by Amy Austin for FT Adviser

20 Jul 2020 Campaigners Aim to Create Pension Scam Database by Michael Klimes & Government eyes unauthorised firms by Justin Cash for MoneyMarketing

17 Jul 2020 – Year ‘dominated’ by FCA shortcomings as 205 complaints made,  by Rachel Mortimer for FT Adviser

29 Jun 2020 – MPs Pushed to Launch Pension Scam Inquiry by Amy Austin for FT Adviser & Lawmakers Urged To Open Inquiry Into Pension Scams by Martin Croucher for Law 360

11 May 2020 – FCA urged to build public trust in independent reviews by Rachel Mortimer for FT Adviser

15 Apr 2020 – Met police lose two thirds of finance officers as fraud soars by Ben Ellery for the Times

20 Mar 2020 – Connaught review delayed as Covid-19 concerns loom by Rachel Mortimer in FT Adviser

07 Jan 2020It’s time to keep your pensions promise, Boris! The PM pledged to help these victims of a huge scam FOUR years ago – and they’re still waiting by Tom Kelly for the Daily Mail.

29 Dec 2019‘Lambs to the slaughter – tens of thousands of savers have lost up to £10billion in rogue pensions schemes sanctioned by the government… and now the taxman is threatening VICTIMS with fines’, by Tom Kelly for the Daily Mail

15 Aug 2019Victims hit by Connaught’s collapse blast City watchdog for ‘whitewashing’ independent review by Lucy White for Daily Mail

18 Jun 2019“I came home to find my house had been stolen!” by Angela Ellis-Jones for the Daily Mail

20 Jun 2019 – FCA orders review of its handling of Connaught collapse by Rachel Mortimer for FT Adviser

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