Daily Dash: Compliance Top Of Mind For FCA Whistleblowers

October 17, 2023
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The UK's Financial Conduct Authority (FCA) has revealed that compliance concerns were the top priority for whistleblowers in Q2, the Bank of Canada has designated Visa and Mastercard as "prominent payment systems", and Booking.com is facing a class action over payments failures.

Compliance Tops UK Whistleblowing Stats 

Compliance was the number-one topic featured in whistleblowing allegations made to the UK's Financial Conduct Authority (FCA) during Q2 of this year, new figures reveal. 

A total of 46 whistleblowing complaints were made to the regulator about compliance issues, while 33 complaints were made about workplace culture and 27 about treating customers fairly.

Topics such as fraud and consumer credit also featured in the top ten topics, with 14 and seven complaints respectively. 

Between April and June, the FCA received 300 new whistleblowing reports.

For the same period in 2022, the FCA received 243 reports, and in January to March this year, the regulator received 280 new whistleblowing reports.

Visa, Mastercard And Interac Designated As Prominent Payment Systems In Canada

The Bank of Canada has designated Visa’s VisaNet, Mastercard’s Global Clearing Management System and Single Message System, and Interac’s Inter-Member Network as prominent payment systems, effective October 16.

The designation means that the card networks have been brought under the central bank’s formal oversight and must comply with the bank's risk management standards, including operational resilience requirements.

The announcement notes that credit card transactions on the Visa and Mastercard networks and debit card transactions on Interac together make up almost C$1trn in payments and account for the majority of point-of-sale transactions.

“Given the significant value and volume of daily transactions and how central they are to the retail payments landscape, a material disruption or failure could negatively impact economic activity,” the central bank said. 

“It could also lead to a loss of confidence in the overall payments system.”

Booking.Com Facing Class Action Over Failure To Pay Hoteliers

Booking.com, the world’s largest hotel bookings platform, could soon be facing a class action lawsuit due to failures to distribute payouts to hoteliers.

According to media reports, hoteliers in Europe and Japan have been affected, with some having to wait weeks or even months to receive their funds from the site.

More than 40 hoteliers, some representing large hotel chains, have contacted Japanese lawyer Hirotaro Kato, who plans to file a class action lawsuit and sue for damages later this week.

Booking.com responded in a statement saying that the issue was caused by a failed update to Booking.com’s internal systems. 

“Most payments have resumed but due to unforeseen technical difficulties, there are still delays with some of our partners,” it said. “We are urgently working to resolve these issues.”

Air Europa Customers Urged To Cancel Credit Cards Following Data Breach

Spanish airline Air Europa has urged customers to cancel their cards following a major breach of credit card data from a company database.

In an email sent to customers, the airline said that card numbers, expiry dates and CVV numbers that it had on file had all been compromised.

It added that there is “no evidence” that the data was breached for the purposes of initiating fraudulent transactions, but advised customers to cancel their cards out of caution.

However, some customers have claimed on social media that they have identified fraudulent activity on their cards since the breach.

In 2018, Air Europa suffered a similar data breach following a cyberattack, and was later fined €600,000 due to its failure to notify almost 500,000 affected customers.

Reserve Bank Of India Slaps Paytm With $0.6m Fine For Lax AML Controls 

The Reserve Bank of India (RBI) has imposed a fine of ₹53.9m ($645,000) on Paytm for non-compliance with certain provisions of India’s know your customer (KYC) regulations.

According to the notice, Paytm failed to identify beneficial owners of certain customers, and did not monitor payout transactions or carry out risk profiling of entities that used its payout services.

Paytm also breached the regulatory ceiling of end-of-the-day balance in certain customer advance accounts and it reported a cybersecurity incident with delay.

The move follows previous encounters of Paytm with the Indian central bank. Last March, the RBI directed Paytm to stop onboarding new customers due to “certain material supervisory concerns” until ordered otherwise.

China Launches CBDC Industrial Park

China has opened an industrial park to foster innovation using the country’s central bank digital currency (CBDC), the digital yuan, according to media reports.

Through this new venture, the government will incentivise enterprises to develop payment solutions, smart contracts, hard wallets and promotions for the digital yuan.

The industrial park is located in the Luohu district of Shenzhen, adjacent to Hong Kong, and will open with ten residents.

These residents include payment card companies Hengbao and Wuhan Tianyu Information, as well as the payment processor Lakala Payment.

Prospective residents are being enticed with perks to settle there. Commercial banks are reportedly being offered up to RMB20m ($2.7m) to settle there, and start-ups are being offered up to RMB50m ($6.9m).

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