The industry regulator, the Financial Services Authority is committed to tackling fraud in financial services and is set to introduce more stringent and frequent checks on firms.
The FSA apparently believes that the level of fraud in the industry is too high and wants to clamp down on it. They will do this by checking how banks, building societies, insurance companies and independent financial advisers protect themselves against fraud.
Our View
Part of our role as regulated firms in the financial services industry is to take 'reasonable care' to implement systems to combat financial crime. This includes fraud.
Whilst it is easier to implement and control systems in smaller companies, banks and building societies and insurers are most at risk because rules seem to be diluted the further down the chain they have to be spread.
Recent news has seen banks fined for having insufficient anti-money laundering systems in place and this seems to be just the start. Combating fraud and money laundering will obviously benefit everyone, so the next time you are asked for evidence of your identity when taking out a policy, spare a thought for those of us risking fines and worse if we can't prove we did it properly!