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Finanstilsynet Inspection Report: Forbrugsforeningen af 1886 (Consumer Association of 1886)

Statement on inspection in the Consumer Association of 1886 (money laundering and payment service area)

In May 2020, the Danish Financial Supervisory Authority inspected the Consumer Association in 1886. The inspection was an investigation of the money laundering area and the payment service area. The inspection included the association’s risk assessment, policies and business procedures in the area of ​​money laundering and the management and organization of the company in the area of ​​payment services.

In May 2020, the Danish Financial Supervisory Authority inspected the Consumer Association in 1886. The inspection was an investigation of the money laundering area and the payment service area. The inspection included the association’s risk assessment, policies and business procedures in the area of ​​money laundering and the management and organization of the company in the area of ​​payment services. 

The Consumer Association is a Danish member and purchasing association. The association aims to ensure benefits for its members. The Consumer Association received a permit as a payment institution in 2010. 

The consumer association has approx. 225,000 members and has entered into an agreement with approx. 4,000 shops, etc. that these provide a form of benefit, which is typically a bonus in percentage, which the Consumer Association administers and pays out to the members as a discount when the members use their payment card issued by the Consumer Association. 

The Danish Financial Supervisory Authority assesses that the risk of the company being used for money laundering or terrorist financing is low. In the assessment, Finanstilsynet has, among other things, emphasized that Forbrugsforeningen’s business model is relatively simple, as Forbrugsforeningen issues and redeems payment cards that can only be used to acquire goods and services at a specified number of stores in Denmark, and that it is not possible to transfer money to other recipients from accounts with the Consumer Association. The Consumer Association only has activities in Denmark. Issuance and redemption of payment cards generally have a low risk of being misused for money laundering and terrorist financing. 

The Consumer Association is one of Denmark’s largest providers of payment services, and the customer portfolio consists exclusively of distance customers, which is basically associated with higher risk. However, the Danish FSA’s assessment is that the overall risk is low. 

Based on the inspection, there are a number of areas that give rise to supervisory reactions. 

Forbrugsforeningen is instructed to ensure that the company has a clear organizational structure with a well-defined transparent and consistent division of responsibilities, including that the board must establish appropriate instructions for the executive board’s work and must determine a risk profile in accordance with Forbrugsforeningen’s business model.

The Consumer Association is instructed to draw up effective procedures for identifying, managing, monitoring and reporting on the risks to which the institute is or may be exposed. 

Forbrugsforeningen is instructed to introduce procedures to ensure that Forbrugsforeningen continuously updates all relevant business procedures in the event of changes in internal conditions or in relevant regulations. 

The consumer association is instructed to prepare written control procedures, in order to ensure that non-compliance with business procedures is discovered. It also means that the Consumer Association must decide which bodies or persons are responsible for following up on the errors and deficiencies that are found in connection with the internal controls.

The Consumer Association is ordered to set target figures for the underrepresented gender on the board. 

The Consumer Association is instructed to revise its risk assessment in the area of ​​money laundering, so that it identifies and assesses the risk of the company being used for money laundering and terrorist financing. In addition, the company must ensure that the risk assessment covers the company’s risk separately for money laundering and terrorist financing. The risk assessment must also be substantiated with relevant information and be based on the national and supranational risk assessments.

The Consumer Association is instructed to ensure that the policy in the area of ​​money laundering is based on the company’s risk assessment prepared in accordance with the Money Laundering Act, section 7, subsection. 1 and that it sets the overall strategic objectives in the field of money laundering. 

The consumer association is instructed to adapt its business procedures in the whitewashing area so that these are sufficiently operational and specifically state the activities that the employees must perform.

Link:

Inspection Report

Categories: Uncategorized

eric9to5

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