On 21 February 2014, the Netherlands Authority for the Financial Markets (AFM) imposed an administrative fine of €96,000 on a financial service provider, hereinafter 'the Offender'. In 2010 and 2011, the Offender brokered financial products, such as insurance and credit, without the licence required by law. That constitutes an infringement of the Financial Supervision Act (Section 2:80, first subsection, Wft). In its decision dated 01 July 2014, the AFM mitigated the fine to €24,000.
The fine was mitigated on the basis of the specific circumstances of this case, which would not individually lead to mitigation, but when considered in their mutual relationship did give cause to do so. In this connection, the AFM considered in particular the principle of equality and, among other things, the circumstance that it was determined within the context of the accelerated fine procedure that clients/consumers had not been disadvantaged substantially in any concrete way.
The Offender requested consumers to provide data via online surveys and sold the data to the financial service providers with which it cooperated. For example, the Offender asked consumers questions about their interest in purchasing or refinancing an insurance product, mortgage loan or consumer credit. The Offender forwarded a selection of the information that was obtained to the financial service providers, who were then able to contact consumers in a targeted manner. The Offender's activities come under the legal term of 'brokerage', which is subject to the licence requirement.
This case is still subject to the old fine scheme, whereby this offence is subject to a fixed fine amount of €96,000. Following the objection, this fine was mitigated to €24,000.
It is important that financial service providers hold an AFM licence. A licence provides additional protection to consumers. Before the AFM grants a licence, it checks, inter alia, whether a financial service provider complies with the requirements of properness, expertise and integrity. Moreover, a financial service provider that holds a licence must comply with the so-called continuous rules of conduct. These concern, inter alia, careful services to consumers.
If you have any questions or comments, please contact the Financial Markets Information Line on: 0800 - 5400 540 (free of charge).
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.