Ecospend appoints Sarah Lambert as Head of Solutions

Ecospend, a leading UK provider of Open Banking APIs, has today announced the appointment of Sarah Lambert as Head of Solutions. Sarah will be working with the team to help Ecospend identify and deliver data-based solutions, powered by open banking technology, that meet the needs of more vulnerable customers.

As a Sales and Affordability product specialist, Sarah will utilise her 20 years’ experience in the financial services industry to identify opportunities where open banking technology can help consumers better manage their finances, either through payments initiation services (PIS) or account information services (AIS).

Through open banking, businesses can better assess consumers’ affordability, meaning they can be placed on payment plans that are more affordable. Not only does this alleviate strain on a business, it also removes many of the pain points faced by consumers when it comes to completing these applications. By applying open banking technologies, Ecospend is helping reduce the chances of consumers entering into financial hardship and help promote social inclusion.

Sarah will play a key role in helping deliver these products to businesses. She joins Ecospend having spent the last two years working closely with the Commercial Director and Development team at Policy in Practice on product improvements and sector opportunities for the business. Prior to this, Sarah worked at IE Hub, developing and improving an affordability platform for consumers and creditors, based on the industry’s Standard Financial Statement (SFS).

Through the appointment of Sarah, Ecospend will not only be able to offer customers the ability to ‘pay-by-bank’ but also an affordability assessment service, providing a complete solution for both businesses and consumers.

James Hickman, CCO, Ecospend, comments: “Sarah is well-respected within the financial services sector, with a wealth of experience in working with UK retail banks, affordability assessment, and international bank and debt purchasing businesses. At Ecospend, we are committed to using open banking technology to deliver real value for businesses and their customers whilst also promoting social inclusion, and Sarah will play a key role in driving this vision forward.”

Sarah Lambert, Head of Solutions, says: “As the benefits of open banking become more and more clear, now is the perfect time for Ecospend to broaden its activity in this area. I look forward to working closely with the team to identify where we can add value and uncover potential new services that will help to ensure social inclusion for all, and to create solutions specific to all Ecospend’s current and potential clients. Understanding data is crucial when assessing affordability and I am eager to help Ecospend in its journey towards delivering products that improve people’s financial situation.”

Research reveals businesses are wasting hours checking documents

New research from anti-money laundering specialist SmartSearch has found regulated businesses are wasting hours processing physical documents for ID checks.

The survey of 500 regulated firms* in the UK revealed a third (30%) of regulated businesses claimed it takes up to a week to process hard copy documents, with a further 21% saying it takes more than a week.

These findings form part of SmartSearch’s Electronic Verification Uncovered campaign which is calling for all regulated businesses to switch to EV, as digital onboarding can be completed in just a few seconds.

Using manual verification methods is not only much more time-consuming, it is also much less secure. Forged documents are becoming increasingly sophisticated and take an expert to spot. Despite this, 28% of regulated businesses claimed that using hard copy documents was a more reliable method for establishing ID.

This statistic is particularly concerning as fraudulent documents are also more frequently being produced, with SmartSearch’s research finding almost half (48%) of respondents had reported a rise in financial crime attempts in the past 12 months.

Regulated businesses are constantly looking for improvements in efficiency, and John Dobson, CEO of SmartSearch explained moving to electronic verification should be a priority.

He commented: “The process for reviewing a physical document is incredibly inefficient. Particularly when working remotely. Requesting a photo of the document., a selfie from the client, waiting for them to send these over. Then checking the two match and reviewing the legitimacy. All this is time that could be better spent.

“Electronic verification works by using credit reference data, combined with other reliable sources, creating a unique ‘composite digital identity’ which is virtually impossible to fake. The best systems can complete a check in just two seconds.

“The Financial Conduct Authority has endorsed the use of electronic verification, and those looking to make the switch should not hesitate. Not only will businesses save time, they will also be contributing to the fight against money laundering.”

Registry Trust and TrustOnline offer an ‘early warning sign’

Registry Trust, the non-profit organisation which maintains the Register of Judgments, Orders, and Fines for the UK and Ireland and runs the website TrustOnline where anyone can carry out a search of the Register, offers a range of services to organisations from credit reference agencies, law firms and insurers, to academic institutions and think tanks as part of its mission to provide ‘public data for the public good’ on monetary judgments.

Its ‘Special Request’ service provides details of individuals and organisations on the Register to enable firms to identify potential customers at a time when they may need debt management advice and services. Each record contains the defendant’s name and address, the date of judgment and the amount of the award and, where available, the court name and case number. The Trust does not hold telephone numbers, e-mail addresses, data concerning the nature of the case or the name of the claimant. Selections are made by postal area and clients can choose either consumer, corporate, or noncorporate (small-medium businesses) categories. These datasets can then be tailored by record value and there is the option to take the data files daily or weekly. This service has been used by many insolvency practitioners and debt management firms in the past and now new data analysis from Registry Trust highlights why it is so useful, especially in the current climate.

The analysis compares commercial CCJ data from the Register of Judgments, Orders and Fines to commercial insolvency data from The Gazette(2).

Of the 79 businesses that became insolvent in May and June 2021, 47% also appeared on the Register, which means they had received a commercial CCJ in the past six years which was still outstanding (either because it had not been paid or had been paid but not formally ‘satisfied’).

Of those that appeared in both datasets, 22% of companies eventually became insolvent after getting just one CCJ and 78% of them became insolvent within 999 days.

The higher the value of the first CCJ received by these companies, the fewer the number of days until they became insolvent.

With the Insolvency Service’s latest corporate insolvency figures for August 2021 showing a 71.1% increase compared to August 2020(1), this insight could help to identify ‘early warning signs’ for the increasing number of companies facing collapse in the wake of the Covid-19 pandemic.

This would support the Insolvency Service’s new five-year strategy which includes: “a new approach, through education and guidance, to support directors to help prevent insolvency and to learn from the experience of a business failure.”

Registry Trust data analyst Millie Corless says: “The unfortunate reality of having an
outstanding commercial CCJ on our Register is reduced access to credit and borrowing, which can be detrimental to a business’ survival. I wanted to find out if a commercial CCJ is an early indicator of insolvency so that this information could be used to offer targeted support to businesses that are at risk. These new findings will hopefully mean that debt management and insolvency firms can make contact with potentially vulnerable companies at an earlier stage to help them try and avoid insolvency.”

Registry Trust CEO Lex Jones adds: “Our data provides a live indicator of indebtedness for both firms and consumers in the UK and Ireland and contains a wealth of information that can be used to inform policymaking, responsible lending and borrowing, and good business decisions.

“The economic recovery from the Covid- 19 pandemic is going to be dependent on up-to-the-minute insight into how businesses, especially smaller companies which are more susceptible to financial decline if they cannot access affordable credit in challenging times, are faring so that the necessary measures and interventions can be put in place.

“Educating businesses and consumers on how to deal with, and in particular how to
‘satisfy’, CCJs so that they do not hamper their ability to do business effectively is vital. The fact that they may be at risk of insolvency should make this a business priority.”

  • (1) According to The Insolvency Service, corporate insolvencies increased by 22.9% to 1,348 in August 2021 compared to July’s figure of 1,097, and increased by 71.1% compared to August 2020’s figure of 788.
  • (2) The Gazette provides the official public record of important statutory and nonstatutory notices.

England and Wales Q3 2021 Statistics

County Court Judgments (CCJs) against businesses in England and Wales rose by 70 percent in Q3 2021, compared to the same quarter in 2020, according to figures released today (14.10.2021) by Registry Trust.

The number of business CCJs increased from 15,970 in Q3 2020 to 27,073 in Q3 2021. The total value of CCJ debt owed by businesses rose by one third, from £81 million to £108 million. The average value of business debt fell by over one fifth (21 percent) from £5,063 to £3,975, while the median value halved falling from £1,919 to £961 over the period.

The number of judgments against larger incorporated businesses increased by 91 percent, from 10,756 to 20,559. The total value rose from £63 million to £89 million, an increase of 42 percent. The average value fell by over one quarter (26 percent) from £5,844 to £4,332, while the median value was down 60 percent from £2,280 to £902.

CCJs against smaller unincorporated businesses also rose, by one quarter, from 5,214 to 6,514. However, the total value rose by just three percent from £18 million to £18.5 million. This meant the average value fell by nearly 18 percent from £3,452 to £2,846, while the median value was down by 14 percent from £1,405 to £1,205.

The number of High Court Judgments against businesses fell by nearly one quarter (24 percent) from 50 to 38, with the total value 62 percent lower at £52 million compared to £137 million in the same period last year. The small number of registered High Court Judgments means these figures are subject to large fluctuations.

Mick McAteer, Chair of Registry Trust, said: “Judgments against businesses in England and Wales saw large increases this quarter compared to the same period last year. At that time, Covid interventions by government and regulators, and forbearance by creditors, had kept judgment numbers at historically low levels. But, numbers have begun to rise again. It looks like Covid economic crisis is far from over for many businesses. This will be worth monitoring as recent Registry Trust research found a link between judgments and subsequent insolvencies”.

AML specialists analyse the common ways to launder money and how to spot them

Money laundering costs the British economy roughly £37 billion each year1 and is a significant issue across the world.

Its prevalence is largely due to the fact that there are multiple different methods of doing it, and these are becoming increasingly sophisticated.

As such, anti-money laundering specialist, SmartSearch, has revealed the most common methods to launder money, using practical examples, to help you spot signs of suspicious behaviour and safeguard against similar cases occurring in the future.

1) Offshore accounts

Criminals handling money obtained from illegal activities can often try to disguise the movement of their funds by using accounts overseas. These accounts are usually in countries where bank secrecy laws are very strict, and the source and details of the transactions are not easily available.

The multiple financial institutions or non-trading anonymous shell companies will often take money without disclosure of its origins making it an appetising prospect for those looking to conceal the true source of funds.

BBC TV drama McMafia, in which an organised crime gang used a corrupt politician to keep moving money around the world, using shell companies to make the money appear legitimate, outlines the real-life issue of how hard it is for governments to detect and police financial fraud.

A keyway to spot signs of this is when money is moved to an account, or a number of different accounts, of which details of who holds the account is withheld or unknown. Another warning sign would be if foreign nationals or overseas residents begin instructing businesses despite the company having no affiliation to that country.

2) Smurfing

When moving large sums of ill-gotten money, a common method of avoiding detection is to break up the funds and deposit it in smaller chunks from multiple different places, so as not to arouse suspicion from banks. This technique is called ‘smurfing’.

Criminal networks can provide different legitimate companies or individuals to make these deposits to raise the appearance of legitimacy and make it harder for illicit activity to be detected.

In popular Netflix show Breaking Bad, chemistry teach turned methamphetamine producer Walter White uses his son’s charity page to clean his drug money through the appearance of many, small, anonymous charitable donations, something that appears alarmingly easy to do without being caught.

In terms of spotting this type of money laundering, keeping a close eye on bank transactions is key. If there are a high number of transactions for unusual and irregular sources from your usual cash flow, it’s possible this is an attempt to mask an illegal stream of income.

3) Money Mules

A money mule is an individual who takes commission to manage and move illegal money for criminals. This could be because the criminals are looking to hide their true wealth to avoid tax, or simply to legitimate funds obtained by illicit activity.

Money mules can be one person, with an extensive knowledge of the financial and banking world to move and invest funds discretely, often making it with legal income from different business streams, or younger, more financially vulnerable, people looking to make quick cash by taking a cut of the money they transfer between accounts.

A classic example of this is in the Oscar award-winning film Shawshank Redemption, where convicted former banker Andy Dufresne laundered money over a long period for the prison warden to help him avoid paying tax, something that wasn’t detected until it was too late.

A sure-fire way to detect a money mule is someone who appears to suddenly become overly secretive of their activity when it comes to managing company finances, combined with a sudden upturn in extra cash or spending power. This same behaviour would be showcased by younger individuals moving money on the streets.

4) Trade-based laundering

In order to clean dirty money, criminals sometimes launder their money using a legitimate business as a front to normalise their cash flow and avoid detection.

Exaggerating operating costs, such as renovations to premises, and adjusting prices for goods and services in invoices are common ways to be able to gradually inject illegally obtained money into the revenue streams of legitimate businesses.

In TV drama Ozark, financial adviser Marty Byrde does exactly this to conceal millions of dollars of drug money for the Mexican cartel. He buys two businesses with huge operating costs, both in need of a face lift, and uses them to funnel money into the banking system to be processed and legalised, highlighting how someone with extensive knowledge of the banking world can get away with consistently committing financial crimes.

Red flags to arouse suspicion when it comes to TBML is discrepancies around price, product quantities and quality of goods when it comes to looking at company accounts and invoices. If something has significantly changed suddenly or the numbers don’t add up, it could be a sign of foul play.

John Dobson, CEO at SmartSearch, commented: “There is no doubt that money laundering continues to plague the financial world, with criminals using increasingly diverse and complex methods to disguise their ill-gotten gains. Such techniques are becoming more and more difficult to uncover for law enforcement and governments around the world.

“TV shows and films that focus on organised crime often have money laundering at their heart and we can see from some classic and extremely gripping stories how criminals can continue to launder huge sums of money and avoid detection for long periods. Sometimes they’re even able to adapt their approach while on the run to stay ahead of the law.

“Although such high-profile cases perhaps don’t play out quite as publicly in real life, some of these fictitious storylines certainly underline very real concerns about the evolution of money laundering, which is only set to intensify with us moving into a more digitised world.

“It is more important than ever that we utilise robust anti-money laundering measures. Stringent ID checks go a long way to safeguarding businesses and individuals against corruption and crime, and we expect the demand to continue rising in this space moving forward.”

Pandora Papers leak shines spotlight on property markets AML weaknesses

Following the Pandora Papers leak, and the BBC uncovering that more than 1,500 UK properties have been bought using offshore firms, John Dobson, CEO of SmartSearch said: “From sex traffickers to drug smugglers and terrorists, those who launder money through purchasing property include some of the worst criminals on the planet.

“Although sadly not a new issue, the threat of money-laundering through the purchase of property has increased recently. With the pandemic causing transactions to be conducted remotely, the UK government recently raised its own assessment of the money laundering risk for the property market from “medium” to “high”.

“For those working in the property purchase chain, offshore buyers should raise a red flag. While legal to own property through an offshore firm, it is key to identify who is actually providing the funds.

“Finding the Ultimate Beneficial Owner, and then screening them against sanctions lists takes significant time through traditional methods.

“This doesn’t need to be the case. By using an electronic verification system, money-laundering through offshore funds could be dramatically reduced.

“The system will identify who is the beneficiary of the transaction, and even screen them against global sanction lists to identify whether they, or anyone they are close to is involved in illicit activities.

“The government is assessing how to prevent money-laundering through legislation, we’d strongly recommend they mandate the use of electronic verification. As the individual is identified through credit checks, electronic verification not only avoids the issue of forged documents, it also screens them against the hundreds of constantly changing worldwide sanctions lists.”

Intrum returns to DCA market in the UK

Credit management group Intrum has returned to the contingency collections market in the UK.

The company now offers a full UK debt collection service, allowing clients to benefit from its continuous investment in technology and analytics as well as award-winning customer care. The move complements Intrum’s established early arrears, white label and debt purchase services.

UK MD Eddie Nott said there is demand from clients for access to high-quality, bespoke collections systems, technology and customer service on a contingency basis.

“The launch of the UK DCA service means we can provide the full cycle of debt collection services to our clients, from white label early arrears to contingency collections and debt purchase. Clients can be sure their customers are in safe hands, with the market leading customer care for which Intrum is renowned.”

As part of the expansion into the DCA market, Intrum has appointed Emma Hardy as Business Development Manager.

Ian Davies, Intrum UK client and sales director, added: “We are delighted that Emma has joined the team as we expand our range of services. She will be working closely with our existing and prospective clients to enable them to access our collections platform and industry-leading customer care.”

SmartSearch appoints new general counsel

Leading UK anti-money laundering specialist SmartSearch has appointed a new in-house general counsel to provide expert guidance on legal issues affecting the business.

Nicola Gifford has joined the rapidly growing regtech specialist, and will oversee the firm’s corporate governance. With over 28-years working at companies such as Johnson & Johnson and HSBC, Gifford brings a vast amount of experience to the role.

SmartSearch’s industry-leading product ensures compliance for regulated businesses in the UK and internationally, therefore Gifford’s expertise is essential to ensure SmartSearch is ahead of the constantly evolving data protection and money-laundering legislation.

Part of Gifford’s responsibilities will be to help further enhance the SmartSearch team’s knowledge so they can have informed conversations with clients. By putting on regular training sessions, each member of the SmartSearch team will improve their knowledge so they can speak to clients on areas such as GDPR and data protection.

Gifford explained: “Being part of SmartSearch in this new role that has been created, means I can integrate myself fully in the business and find innovative solutions to problems.

“Working in-house means I’m available to be involved in conversations day-to-day, for example helping the team deal with customer queries, developing contracts for suppliers and clients, and supporting on the development of new products.

“One of the parts of my role I enjoy most is upskilling and equipping everyone in the business to prepare them with the knowledge they need to do their roles more effectively.

“In addition to the improving the overall expertise of everyone in the business, I also want to start consulting with other compliance professionals so we can have a voice on codes of conduct and the direction digital verification takes in the future.”

SmartSearch launches new weapon in fight against global money laundering

Leading UK anti-money laundering specialist SmartSearch has launched a new weapon in the ongoing fight against dirty cash being cleaned around the world through activity such as buying property.

Organised crime gangs and fraudsters are now thought to be responsible for up to $2 trillion a year in money laundering, which is being enabled due to a lack of basic ID checks and document verification, according to SmartSearch.

In response the multi-award winning RegTech 100 firm has now launched SmartDoc, the most advanced document verification system on the market, using a combination of cutting-edge facial ID technology and a level of expert analysis at the same level as border security officials.

John Dobson, SmartSearch CEO, said SmartDoc would not only help businesses in the property, legal and financial service sectors prevent fraud, but also help them remain compliant with global regulations which would result in hefty fines and even prosecution if breached.

He said: “We have built a reputation over the past ten years for our market-leading digital verification solution, which is by far the most effective way to carry out anti-money laundering (AML) and Know Your Customer (KYC) checks.

“But we have launched SmartDoc to run alongside that as another weapon in the armoury for those businesses which feel the need to carry out document verification as part of their customer due diligence.

“The new SmartDoc solution incorporates facial recognition to identify forged ID documents which include photographs, such as passports, driving licences, work permits amongst others.

“SmartDoc will ensure regulated businesses can securely authenticate customer identities, preventing fraud and allowing them to remain compliant with AML legislation.

“While we would always advise customers that electronic verification is the quickest and most reliable way to perform KYC and AML checks, a document checking solution is a key tool due to the vast increase in attempted fraud as a result of the global pandemic.

“The lack of face-to-face interactions caused by lockdown opened a window for criminals to attempt to deceive, and despite restrictions being relaxed, this wave of fraud has not stopped.

“But businesses need to be aware that they are responsible for ensuring they comply with AML regulations and could face severe fines for allowing this activity to go on unchecked.”

The new feature has been developed in part in response to feedback from SmartSearch clients and, by combining leading document authentication technology and the latest biometric verification and liveness detection techniques, SmartDoc provides an accurate picture of the customer, which removes the need for face-to-face interaction.

Not only does the technology confirm whether a document is genuine and unaltered, but that it also belongs to the person presenting it, providing an additional layer of security to identity checks.

It then provides a pass-fail result and also screens the customer against politically exposed persons (PEP) and sanctions lists.

The SmartDoc service combines machine-learning interrogation and an optical character recognition algorithmic check on the ID document machine readable zone, verifying whether the document is genuine and unaltered, with a full data integration to identify document tampering.

Where necessary, it also uses visual scrutiny by a border security trained ID document expert, who will examine every aspect to check security features found in genuine documents, as well as key indicators of potential forgery.

Inclusion In Credit set to share knowledge and best practice

CCR and Arvato Financial Solutions are set to carry out in-depth research and discussion into the reality of inclusion in the credit, collections, and enforcement sector, and are looking for a diverse Oversight Board of industry professionals to oversee this work.

Society has taken significant steps in terms of its acceptance of people of all gender, sexuality, disability, colour, and creed, but, as has been highlighted by several social movements over the past couple of years, there is still some way to go. Likewise, in the credit, collections, and enforcement industry, there are a range of experiences as different individuals face different challenges.

However, there has been relatively little work done to understand the perspectives and needs of diverse communities in the industry, and, at this time of unparalleled social change, CCR intends to change this by carrying out a major piece of work, including: a Research Project, a Round-Table Debate, and a series of Articles from new voices.

Stephen Kiely, editor of CCRMagazine, said: “With pressure coming from the Financial Conduct Authority and the continued economic fall-out from Covid – especially from a new cohort of debtors who have never even been in arrears before – the industry needs to show that it is dealing in a responsible fashion for everyone, and it needs its customer to understand that this is the case so they are comfortable and confident in engaging.

“We hope this project will play a major part in this important effort, by sharing knowledge and best practice, so if you would be interested in guiding this work, please put your name forward.”

  • To put your name forward to be part of the Inclusion In Credit 2022 Oversight Board, please email stephen@ccrmagazine.co.uk.