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Policy under Tenant Fees Act 2019


Background to the Policy

As the Lead Enforcement Authority (“the LEA”) under the Tenant Fees Act 2019 (“the TFA 2019”) Bristol City Council (“BCC”) has issued Policy for enforcement authorities on deciding on a financial penalty amount and determining when it is appropriate to prosecute as an alternative to making a financial penalty. The Devon, Somerset and Torbay Trading Standards Service (“The Service”) of Devon County Council (“The Council”) has had regard to the Lead Authority in forming this policy. The Policy will apply in any area where the Service acts. Enforcement Authorities are expected to develop and document their own policy on determining the level of penalty or when to prosecute and when to issue a civil penalty.

This Policy should be read in conjunction with both the Statutory Guidance for the TFA 2019 and the Devon, Somerset and Torbay Trading Standards Service Enforcement Policy.

1. Legal Reference

The TFA 2019 prohibits the charging of fees in respect of a tenancy other than those which are specifically permitted and amends other legislation as follows:

a. in respect of the duty of letting agents to publicise fees etc under Section 87 of the Consumer Rights Act 2015

b. in relation to the duty placed on enforcement authorities to have regard to any guidance issued by the Secretary of State (“the SoS”) relating to the enforcement of an order under s83(1) of 84(1) as per Section 85 of the Enterprise & Regulatory Reform Act 2013

c. in respect of the duty to enforce being subject to Section 26 of the TFA 2019 under Article 7 of the Redress Schemes for Lettings Agency Work and Property Management Work (requirement to belong to a Scheme etc.) England) Order 2014

d. in relation to the meaning of ‘Lead Enforcement Authority’; under Section 135 of the (enforcement of client money protection scheme regulations) of the Housing and Planning Act 2016

e. in respect of the LEA as an alternative to the SoS where the SoS is not the LEA under Article 7 of the Redress Schemes for Lettings Agency Work and Property Management Work (requirement to belong to a Scheme etc.) England) Order 20143. As per s25(5) TFA 2019 there will be situations when the LEA will not be acting as the SoS but will be acting in the capacity as the LEA under the TFA. In those situations the SoS can advise or direct the LEA.

2. TFA Sanctions

2.1. The TFA 2019 provides that enforcement authorities may impose financial penalties of up to £30,000 depending on the breach as follows:

a. In respect of Prohibited Payments under SS 1& 2 of the TFA 2019 a financial penalty not exceeding £5,000 for a first breach.

b. Under s 12 of the TFA 2019 a second or subsequent breach within five years of the previous breach provides for a financial penalty not exceeding £30,000.00 and there is power to prosecute in the Magistrates Court where an unlimited fine may be imposed.

The Service will determine what is the most appropriate and effective sanction, whether it is appropriate to impose a financial penalty or prosecute in any relevant case having due regard to the Service Enforcement Policy.

2.2. Other Types of Enforcement Action that may be taken

In appropriate circumstances consideration will be given to informal action such as warning letters or advice, in an effort to secure compliance, and will be done so in accordance with the Service Enforcement Policy.

3. Consequential Amendments brought about by the TFA 2019

Additionally, the TFA 2019 amends the legislation referred to in paragraph 1 above and which separately provide that penalties may be imposed as follows:

i. In respect of a failure of Letting Agents to publicise their fees as required by s83(3) of the CRA 2015 a financial penalty not exceeding £5,000.00.

ii. In respect of a failure by any person engaged in Letting Agency or Property Management work who fails to hold membership of a Redress Scheme as required by Article 3 Redress Schemes for Lettings Agency Work and Property Management Work (requirement to belong to a Scheme etc.) England) Order 2014 (in respect of Lettings Agency work) or Article 5 (in respect of property management work) to a financial penalty not exceeding £5,000. Note that it is not sufficient to simply register for redress – the correct category of membership must be obtained depending on the work carried out. This is currently only enforceable by District and Unitary Local Authorities and the Lead Enforcement Authority.

iii. In respect of a failure by a property agent who holds client money to belong to an approved or designated Client Money Protection (“CMP”) Scheme as required by Regulation 3 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019, a financial penalty not exceeding £30,000.00.

iv. In respect of a failure to obtain a certificate confirming membership or display that certificate as required or publish a copy of that certificate on the relevant website (where one exists) or produce a copy of the certificate free of charge to any person reasonably requiring it as required by Regulation 4(1) of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 a financial penalty not exceeding £5,000.00.

v. In respect of a failure by a property agent to notify any client within 14 days of a change in the details of an underwriter to the CMP scheme or that the membership of the CMP scheme has been revoked as required by Regulation 4(2) of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 a financial penalty not exceeding £5,000.00.

4. Statutory Guidance

The Ministry of Housing, Communities & Local Government (“MHCLG”) has published the Tenant Fees Act 2019: Statutory Guidance for enforcement authorities.

This is statutory guidance to which enforcement authorities must have regard to in relation to enforcing the TFA 2019. This statutory guidance recommends certain factors that an enforcement authority should take into account when deciding on the level of financial penalties under the TFA 2019 and further recommends that enforcement authorities develop and document their own Policy on determining the appropriate level of financial penalty in a particular case.

5. Determining the level of the financial penalty

In accordance with the provisions of the TFA 2019 the level of financial penalties is to be determined by the Service. Although the statutory guidance recommends factors which may be taken into account it does not go into any significant level of detail in this regard. Each of those factors will be considered as a part of the Service’s decision making process and they are:

a. The history of compliance/non-compliance

b. The severity of the breach

c. Deliberate concealment of the activity and/or evidence

d. Knowingly or recklessly supplying false or misleading evidence

e. The intent of the landlord/agent, individual and/or corporate body

f. The attitude of the landlord/agent

g. The deterrent effect of a prosecution on the landlord/agent and others

h. The extent of financial gain as a result of the breach.

Although the Service has therefore a wide discretion in determining the appropriate level of financial penalty in any particular case, regard has been given to the statutory guidance when making this policy.

The Civil penalty as an alternative to prosecution under the Housing Act 2004 policy was reviewed in 2018 and was informed by the principles contained in Sentencing Council Health and Safety Offences, Corporate Manslaughter and Food Safety and Hygiene Offences Definitive Guideline. The Service believes this to be a fair, relevant and reasonable model to follow; this policy was widely consulted on with various stakeholders.

Appendix 1 of this policy contains the processes that the Service will use in order to determine the level of financial penalty under the TFA 2019. All stages subsequent to the issue of a Notice of Intent are subject to statutory time limits and the impact off the exercise by the Landlord or Agent of the Appeal process.

Appendix 1 – The Service’s process for determining the level of penalty to set

Step one – Determining the offence category

The Service will determine the breach category using only the culpability and category of harm factors below. Where an offence does not fall squarely into a category, individual factors may require a degree of weighting to make an overall assessment. The Service may also apply a discretionary factor in order to reflect consistency across England and may consider decisions in other UK jurisdictions where they contain some relevant and persuasive content.

Culpability

Very high: Where the Landlord or Agent intentionally breached, or flagrantly disregarded, the law or has/had a high public profile which may include any significant role in a trade or business representative organisation and knew their actions were unlawful.

High: Actual foresight of, or wilful blindness to, risk of a breach but risk nevertheless taken.

Medium: Breach committed through act or omission which a person exercising reasonable care would not commit.

Low: Breach committed with little fault, for example, because:

  • significant efforts were made to address the risk although they were inadequate on the relevant occasion
  • there was no warning/circumstance indicating a risk
  • failings were minor and occurred as an isolated incident.

Harm

The following factors relate to both actual harm and risk of harm. Dealing with a risk of harm involves consideration of both the likelihood of harm occurring and the extent of it if it does.

Category 1 – High Likelihood of Harm
  • Serious adverse effect(s) on individual(s) and/or having a widespread impact due to the nature and/or scale of the Landlord’s or Agent’s business.
  • High risk of an adverse effect on individual(s) – including where persons are vulnerable. A wide definition of vulnerability will be used. See Appendix 2 for a non-exhaustive list.
Category 2 – Medium Likelihood of Harm
  • Adverse effect on individual(s) (not amounting to Category 1).
  • Medium risk of an adverse effect on individual(s) or low risk of serious adverse effect.
  • Tenants and/or legitimate landlords or agents substantially undermined by the conduct.
  • The Service’s work as a regulator is inhibited.
  • Tenant or prospective tenant misled.
Category 3 – Low Likelihood of Harm
  • Low risk of an adverse effect on actual or prospective.
  • Public misled but little or no risk of actual adverse effect on individual(s).

We will define harm widely and victims may suffer financial loss, damage to health or psychological distress (especially vulnerable cases). There are gradations of harm within all of these categories.

The nature of harm will depend on personal characteristics and circumstances of the victim and the assessment of harm will be an effective and important way of taking into consideration the impact of a particular crime on the victim.

In some cases no actual harm may have resulted and enforcement authority will be concerned with assessing the relative dangerousness of the offender’s conduct; it will consider the likelihood of harm occurring and the gravity of the harm that could have resulted.

To the community

Some offences cause harm to the community at large (instead of or as well as to an individual victim) and may include economic loss, harm to public health, or interference with the administration of justice.

Step two – Starting point and category range

Having determined the category that the breach falls into, the Service will refer to the following starting points to reach an appropriate level of civil penalty within the category range. The Service will then consider further adjustment within the category range for aggravating and mitigating features.

Obtaining financial information

The statutory guidance advises that local authorities should use their powers under Schedule 5 to the CRA 2015 to, as far as possible, make an assessment of a Landlord’s or Agent’s assets and any income (not just rental or fee income) they receive when determining an appropriate penalty. The Service will use such lawful means as are at its disposal to identify where assets might be found.

In setting a financial penalty, the Service may conclude that the Landlord or Agent is able to pay any financial penalty imposed unless the Service has obtained, or the Landlord or Agent has supplied, any financial information to the contrary. The subject of a Final Notice, or a Notice of Intent where the subject does not challenge it, will be expected to disclose to the Service such data relevant to his/her financial position to facilitate an assessment of what that person can reasonably afford to pay. Where the Service is not satisfied that it has been given sufficient reliable information, the Service will be entitled to draw reasonable inferences as to the person’s means from evidence it has received, or obtained through its own enquiries, and from all the circumstances of the case which may include the inference that the person can pay any financial penalty.

Starting points and ranges

The tables in Appendices 4-10 below give the starting points, minimum and maximum financial penalties for each harm category and level of culpability for each type of breach.

  • Appendix 4 First breach in respect of a Prohibited Payment.
  • Appendix 5 Second and subsequent breach in respect of a Prohibited Payment.
  • Appendix 6 Breach of Publication of Fees requirements.
  • Appendix 7 Breach in respect of membership of a Redress Scheme.
  • Appendix 8 Breach in respect of membership of a Client Money Protection Scheme.
  • Appendix 9 Breach in respect of certificates in respect of a Client Money Protection Scheme.
  • Appendix 10 Breach of transparency requirements in respect of a Client Money Protection Scheme.

Context

Below is a list of some, but not all factual elements that provide the context of the breach and factors relating to the Landlord or Agent. The Service will identify whether any combination of these, or other relevant factors, should result in an upward or downward adjustment from the starting point. In particular, relevant recent convictions (see Appendix 3 for a list of relevant convictions) are likely to result in a substantial upward adjustment. In some cases, having considered these factors, it may be appropriate to move outside the identified category range which will not exceed the statutory maximum permitted in any case.

Factors increasing seriousness

Aggravating factors:

  • Previous breaches of the TFA 2019
  • Previous convictions, having regard to:
    • the nature of the offence to which the conviction relates and its relevance to the current breach; and,
    • the time that has elapsed since the conviction.

Other aggravating factors may include:

  • Motivated by financial gain.
  • Deliberate concealment of illegal nature of activity.
  • Established evidence of wider/community impact.
  • Obstruction of the investigation.
  • Record of poor compliance.
  • Refusal of advice or training or to become a member of an Accreditation scheme.

Factors reducing seriousness or reflecting personal mitigation:

  • Deliberate concealment of illegal nature of activity.
  • Established evidence of wider/community impact.
  • No previous or no relevant/recent breaches.
  • No previous convictions or no relevant/recent convictions.
  • Steps voluntarily taken to remedy problem.
  • High level of co-operation with the investigation, beyond that which will always be expected.
  • Good record of relationship with tenants.
  • Self-reporting, co-operation and acceptance of responsibility.
  • Good character and/or exemplary conduct.
  • Mental disorder or learning disability, where linked to the commission of the breach.
  • Serious medical conditions requiring urgent, intensive or long-term treatment and supported by medical evidence.

Step three – General principles to consider in setting a penalty

The Service will finalise the appropriate level of penalty so that it reflects the seriousness of the offence and the Service must take into account the financial circumstances of the Landlord or Agent if representations are made by the Landlord or Agent following the issue of a Notice of Intent.

The level of financial penalty should reflect the extent to which the conduct fell below the required standard. The financial penalty should meet, in a fair and proportionate way, the objectives of punishment, deterrence and the removal of gain derived through the commission of the breach; it should not be cheaper to breach than to take the appropriate precautions and a fundamental principle involved is that there should be no financial gain to the perpetrator from the commission of the breaches.

If issuing a financial penalty for more than one breach, or where the offender has already been issued with a financial penalty, The Service will consider whether the total penalties are just and proportionate to the offending behaviour and will have regard to the factors in step eight below.

Step four – Issue Notice of Intent

The Service will issue a Notice of Intent within six months of the enforcement authority having sufficient evidence that the Landlord or Agent has breached the TFA 2019. If the breach is ongoing the six-month deadline continues until the breach ceases. A Notice of Intent can be served spontaneously.

While there are slight variations in the Statutory requirements according to which breach is being addressed a Notice of Intent will typically contain the date of the Notice, the amount of the proposed penalty, the reason for imposing the penalty and how the recipient can make representations concerning the penalty.

See examples of Notices of Intent in the Lead Authority Guidance.

Step five – Consideration of representations and review of financial penalty where appropriate

The Service should review the penalty and, if necessary adjust the initial amount reached at step four, and represented in the Notice of Intent, to ensure that it fulfils the general principles set out below.

Any quantifiable economic benefit(s) derived from the breach, including through avoided costs or operating savings, should normally be added to the total financial penalty arrived at in step two. Where this is not readily available, the Service may draw on information available from enforcing authorities and others about the general costs of operating within the law. Whether the penalty will have the effect of putting the offender out of business will be relevant but in some serious cases this might be an acceptable outcome.

Step six – Reductions

The Service will consider any factors which indicate that a reduction in the penalty is appropriate and in so doing will have regard to the following factors relating to the wider impacts of the financial penalty on innocent third parties; such as (but not limited to):

  • The impact of the financial penalty on the Landlord or Agent’s ability to comply with the law or make restitution where appropriate
  • The impact of the financial penalty on employment of staff, service users, customers and the local economy.

The following factors will be considered in setting the level of reduction. When deciding on any reduction in a financial penalty, consideration will be given to:

  • The stage in the investigation or thereafter when the offender accepted liability
  • The circumstances in which they admitted liability
  • The degree of co-operation with the investigation.

The maximum level of reduction in a penalty for an admission of liability will be one-third. In some circumstances there will be a reduced or no level of discount. This may occur for example where the evidence of the breach is overwhelming or there is a pattern of breaching conduct.

Any reduction should not result in a penalty which is less than the amount of gain from the commission of the breach itself.

Step seven – Additional actions

In all cases the Service must consider whether to take additional action. These may include further enforcement action itself or reference to other organisations where appropriate.

Step eight – Totality of breaching conduct

Where the offender is issued with more than one financial penalty, the Service should consider the following guidance from the definitive guideline on Offences Taken into Consideration and Totality which appears to the Service to be an appropriate reference and guide.

As the total financial penalty is inevitably cumulative the Service should determine the financial penalty for each individual breach based on the seriousness of the breach and taking into account the circumstances of the case including the financial circumstances of the Landlord or Agent so far as they are known, or appear, to the Service.

The Service should add up the financial penalties for each offence and consider if they are just and proportionate. If the aggregate total is not just and proportionate the Service should consider how to reach a just and proportionate total financial penalty. There are a number of ways in which this can be achieved.

For example, where a Landlord or Agent is to be penalised for two or more breaches or where there are multiple breaches of a repetitive kind, especially when committed against the same person, it will often be appropriate to impose for the most serious breach a financial penalty which reflects the totality of the conduct where this can be achieved within the maximum penalty for that breach. No separate penalty should be imposed for the other breaches. Where a Landlord or Agent is to be penalised for two or more breaches that arose out of different incidents, it will often be appropriate to impose separate financial penalties for each breach. The Service should add up the financial penalties for each breach and consider if they are just and proportionate. If the aggregate amount is not just and proportionate the Service should consider whether all of the financial penalties can be proportionately reduced. Separate financial penalties should then be imposed.

Where separate financial penalties are passed, the Service must take care to ensure that there is no double-counting.

Step nine – recording the decision

The officer making a decision about a financial penalty will record their decision giving reasons for coming to the amount of financial penalty that will be imposed.

Appendix 2 – Non-exhaustive list of vulnerable people

  • Young adults and children.
  • Persons vulnerable by virtue of age.
  • Persons vulnerable by virtue of disability or sensory impairment.
  • People on a low income.
  • Persons with a drug or alcohol addiction.
  • Victims of domestic abuse.
  • Children in care or otherwise vulnerable by virtue of age.
  • People with complex health conditions.
  • People exploited where English is not their first language.
  • Victims of trafficking or sexual exploitation.
  • Refugees.
  • Asylum seekers.
  • People at risk of harassment or eviction.
  • People at risk of homelessness.

Appendix 3 – Non exhaustive list of relevant offences/breaches

Housing law or landlord and tenant related offences under:

  • The Public Health Acts of 1936 and 1961.
  • The Building Act 1984.
  • The Environmental Protection Act 1990.
  • The Town and Country Planning Act 1990.
  • The Prevention of Damage by Pests Act 1949.
  • The Protection from Eviction Act 1977.
  • The Local Government (Miscellaneous Provisions) Acts of 1982 and 1976.
  • The Housing Grants, Construction and Regeneration Act 1996.
  • The Local Government and Housing Act 1989.
  • The Housing Act 2004.

Offences involving fraud

Offences in which the victim has been deprived of money, property or other benefit by misrepresentation/deception on the part of the offender including:

  • Theft
  • Burglary
  • Fraud
  • Benefit fraud (particularly where tenants are in receipt of Housing Benefit)
  • Conspiracy to defraud
  • Obtaining money or property by deception
  • People trafficking
  • Being struck off as a company director.

Offences involving violence

A conviction for the offence of:

  • Murder.
  • Manslaughter.
  • Arson.
  • Malicious wounding or grievous bodily harm.
  • Grievous bodily harm with intent.
  • Actual bodily harm.
  • Grievous bodily harm.
  • Robbery.
  • Criminal damage where the intent was to intimidate or was racially aggravated.
  • Common assault.
  • Common assault which is racially aggravated.
  • Assault occasioning actual bodily harm.
  • Possession of an offensive weapon.
  • Possession of a firearm.

Offences involving drugs

Consideration should be given to the nature of the offence and what bearing it could have on the Landlord or Agents business activities. The nature, quantity, purity and class of drugs should be taken into account. In addition where an offence of possession with intent to supply is involved regard should be had to the role and importance of, the subject in the supply chain.

Offences involving sexual offences

An offence contained in schedule 3 of the Sexual Offences Act.

Unlawful discrimination

Unlawful discrimination can include findings of an Industrial Tribunal on unlawful employment practice such as discrimination under the Disability Discrimination Act. Consideration should be given to the nature of the unlawful discrimination and what bearing it could have on the management of a licensable property.

Other offences

Modern Slavery/ Human Trafficking.

Offences involving the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control of another person, for the purpose of exploitation is likely to attach a lower level of culpability.

Appendix 4 – Financial Penalty in the case of a first breach in respect of Prohibited Payments

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £5,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£1,250£250£2,250
Low culpability: Harm category 2£1,500£500£2,500
Low culpability: Harm category 1£1,750£750£2,750
Medium culpability: Harm category 3£2,000£1,000£3,000
Medium culpability: Harm category 2£2,250£1,250£3,250
Medium culpability: Harm category 1£2,500£1,500£3,500
High culpability: Harm category 3£2,750£1,750£3,750
High culpability: Harm category 2£3,000£2,000£4,000
High culpability: Harm category 1£3,250£2,250£4,250
Very high culpability: Harm category 3£3,500£2,500£4,500
Very high culpability: Harm category 2£3,750£2,750£4,750
Very high culpability: Harm category 1£4,000£3,000£5,000

Appendix 5 – Financial Penalty in the case of a second or subsequent breach in respect of Prohibited Payments within five years of a previous breach

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £30,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£3,500£2,000£8,000
Low culpability: Harm category 2£6,500£4,000£10,000
Low culpability: Harm category 1£8,500£4,500£15,000
Medium culpability: Harm category 3£6,500£4,750£17,000
Medium culpability: Harm category 2£10,500£5,000£20,000
Medium culpability: Harm category 1£12,500£5,500£22,000
High culpability: Harm category 3£10,500£5,500£20,000
High culpability: Harm category 2£15,000£6,250£24,000
High culpability: Harm category 1£18,000£7,000£26,000
Very high culpability: Harm category 3£15,000£7,000£24,000
Very high culpability: Harm category 2£17,500£7,250£28,000
Very high culpability: Harm category 1£20,000£7,500£30,000

Appendix 6 – Financial Penalty in the case of a breach in respect of Publication of Fees

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £5,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£1,250£250£2,250
Low culpability: Harm category 2£1,500£500£2,500
Low culpability: Harm category 1£1,750£750£2,750
Medium culpability: Harm category 3£2,000£1,000£3,000
Medium culpability: Harm category 2£2,250£1,250£3,250
Medium culpability: Harm category 1£2,500£1,500£3,500
High culpability: Harm category 3£2,750£1,750£3,750
High culpability: Harm category 2£3,000£2,000£4,000
High culpability: Harm category 1£3,250£2,250£4,250
Very high culpability: Harm category 3£3,500£2,500£4,500
Very high culpability: Harm category 2£3,750£2,750£4,750
Very high culpability: Harm category 1£4,000£3,000£5,000

Appendix 7 – Financial Penalty in the case of a breach in respect of Membership of a Redress Scheme

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £5,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£1,250£250£2,250
Low culpability: Harm category 2£1,500£500£2,500
Low culpability: Harm category 1£1,750£750£2,750
Medium culpability: Harm category 3£2,000£1,000£3,000
Medium culpability: Harm category 2£2,250£1,250£3,250
Medium culpability: Harm category 1£2,500£1,500£3,500
High culpability: Harm category 3£2,750£1,750£3,750
High culpability: Harm category 2£3,000£2,000£4,000
High culpability: Harm category 1£3,250£2,250£4,250
Very high culpability: Harm category 3£3,500£2,500£4,500
Very high culpability: Harm category 2£3,750£2,750£4,750
Very high culpability: Harm category 1£4,000£3,000£5,000

Appendix 8 – Financial Penalty in the case of a breach in respect of a failure to obtain membership of a Client Money Protection Scheme

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £30,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£3,500£2,000£8,000
Low culpability: Harm category 2£6,500£4,000£10,000
Low culpability: Harm category 1£8,500£4,500£15,000
Medium culpability: Harm category 3£6,500£4,750£17,000
Medium culpability: Harm category 2£10,500£5,000£20,000
Medium culpability: Harm category 1£12,500£5,500£22,000
High culpability: Harm category 3£10,500£5,500£20,000
High culpability: Harm category 2£15,000£6,250£24,000
High culpability: Harm category 1£18,000£7,000£26,000
Very high culpability: Harm category 3£15,000£7,000£24,000
Very high culpability: Harm category 2£17,500£7,250£28,000
Very high culpability: Harm category 1£20,000£7,500£30,000

Appendix 9 – Financial Penalty in the case of a breach in respect of issues relating to certificates of evidence of Membership of a Client Money Protection Scheme

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £5,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£1,250£250£2,250
Low culpability: Harm category 2£1,500£500£2,500
Low culpability: Harm category 1£1,750£750£2,750
Medium culpability: Harm category 3£2,000£1,000£3,000
Medium culpability: Harm category 2£2,250£1,250£3,250
Medium culpability: Harm category 1£2,500£1,500£3,500
High culpability: Harm category 3£2,750£1,750£3,750
High culpability: Harm category 2£3,000£2,000£4,000
High culpability: Harm category 1£3,250£2,250£4,250
Very high culpability: Harm category 3£3,500£2,500£4,500
Very high culpability: Harm category 2£3,750£2,750£4,750
Very high culpability: Harm category 1£4,000£3,000£5,000

Appendix 10 – Financial Penalty in the case of a breach in respect of transparency issues relating to Membership of a Client Money Protection Scheme

The table below gives the starting points, minimum and maximum financial penalties for each harm category and level of culpability. Where exceptional circumstances apply the Service may reduce the minimum penalties further but may not increase them above the maximum permitted of £5,000.

Level of culpability and harm categoryStarting pointRange minimumRange maximum
Low culpability: Harm category 3£1,250£250£2,250
Low culpability: Harm category 2£1,500£500£2,500
Low culpability: Harm category 1£1,750£750£2,750
Medium culpability: Harm category 3£2,000£1,000£3,000
Medium culpability: Harm category 2£2,250£1,250£3,250
Medium culpability: Harm category 1£2,500£1,500£3,500
High culpability: Harm category 3£2,750£1,750£3,750
High culpability: Harm category 2£3,000£2,000£4,000
High culpability: Harm category 1£3,250£2,250£4,250
Very high culpability: Harm category 3£3,500£2,500£4,500
Very high culpability: Harm category 2£3,750£2,750£4,750
Very high culpability: Harm category 1£4,000£3,000£5,000

 



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