The FCA has carried out a review of the key harms and drivers of harm caused by ARs and IARs in the credit broking market. Key areas where some principals could improve are;
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making sure they undertake criminal or credit checks;
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ensuring their onboarding procedures are effective and up to date – especially if they have not onboarded ARs for a while;
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intelligently challenging Companies House results on individuals so they look at links individuals have previously had that might indicate a cause for concern, rather than just matching names to company records;
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using more human oversight on automated checks;
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carrying out open-source checks;
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taking to other former or current principals;
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giving greater consideration to the impact of appointing an AR on the principal firm’s financial and non-financial resources and their ability to monitor their ARs; and
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ensuring they understand the contractual requirements for AR agreements.
Good practices the FCA has noted include:
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