On 14 July 2011, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €1,000 on Lifetime Hypotheken BV (Lifetime), with its registered office in Weert. The fine was imposed because Lifetime failed to check the reliability of its employees. It concerned employees who, under its responsibility, were directly involved in financial services provided to consumers. The reliability of these customer relations officers has to be beyond any doubt.
The AFM granted Lifetime a licence that also applies to companies affiliated with Lifetime (affiliated companies). The acts and omissions of these affiliated companies consequently apply as acts and omissions on the part of Lifetime, according to the Financial Supervision Act (Wft). The AFM has established that, during the period of 15 July 2008 to 8 July 2010, five of these affiliated companies failed to check whether the reliability of the employees involved was beyond any doubt. In addition, Lifetime cooperated with freelancers who could also be considered to be customer relations officers. The AFM has established that, during the period of 15 July 2008 to 8 July 2010, Lifetime failed to check the reliability of three freelancers. This means that Lifetime acted contrary to Article 28(1) of the Decree on Conduct of Business Supervision of Financial Undertakings under the Wft (Bgfo).
According to the Bgfo, financial service providers are required to ensure that the reliability of employees and other natural persons who are directly involved in the provision of financial services under the responsibility of the relevant financial service provider is beyond doubt. According to the Bgfo, a person as referred to in the previous sentence is reliable if he is able to submit a Certificate of Good Conduct and he has not been declared bankrupt, unless rehabilitation has taken place. This provision is intended to guarantee the ethical business conduct of the financial service provider and thereby to promote confidence in the financial markets. If a financial service provider works with affiliated companies, the customer relations officers of the affiliated companies works remotely. In view of this distance, financial service providers have to monitor explicitly that each affiliated company checks the reliability of customer relations officers (in a timely fashion).
The Penalty Scheme in Financial Legislation (Amendment) Act (the new fines act) and the Administrative Fines in Financial Legislation Decree (Decree on Administrative Fines) entered into effect on 1 August 2009. The fines act and the Decree on Penalties under the Wft apply, because the violation commenced before 1 August 2009.
The fine has become final as no objection or appeal can be submitted against the decision anymore.
If you have any questions or comments you can contact the Financial Markets Information Line on: 0900-5400 540 (5 eurocents per minute).
The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.
The AFM is committed to promoting fair and transparent financial markets.
As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.