MLR1PP10300 - Penalty Guidance: Breaches which will be treated as neglect

Essentially this is when the business has failed to take reasonable steps to comply with the Regulations.

As with instances where a breach of the Regulations is a result of a genuine mistake, it is not possible to describe every set of circumstances when a breach will be the result of neglect or failing to take reasonable care.

In general when we have identified that there has been a breach of the Regulations it will initially be treated by us as a failure to take reasonable steps. This is our default position. Once the reasons for the breach have been established we will, depending on the specific facts, consider whether it should then be treated as a mistake or deliberate failing.

The following are examples of where the breach, unless there are mitigating or aggravating circumstances, should be treated as neglect. Under these circumstances issuing a penalty, reduced by the standard reductions shown in the penalty reduction matrix, will be the most appropriate action to take. See MLR1PP10000 for more details about penalty reductions

• A business who has not followed the advice we have given about the steps they are required to take to become compliant with a specific Regulation
• A business that following a Compliance Visit was sent a warning letter or penalty notice subsequently failed to take affirmative action to correct any the failings that were identified in the warning letter or penalty notice.
• A business who was registered with us under the 2003 Regulations and received either a warning or penalty for failing to comply with these Regulations, and who has subsequently failed to comply with a parallel requirement in the 2007 Regulations. For example, failing to undertake identity checks up to minimum customer due diligence standards.
• A new business who did not register with us on time even though we made them aware of the requirement to be registered.