Consumer Protection Enforcement: Persistent Conduct Risk Identified

Overview

Recent enforcement actions underscore the persistent and widespread nature of consumer protection failings across multiple jurisdictions and firm types. Regulators are targeting breaches ranging from misleading representations to suitability and execution failures.

In New Zealand, the Financial Markets Authority (FMA) has taken action against several financial institutions. Kiwibank was warned for failing to apply age-based fee waivers, resulting in over NZD 812,500 in overcharges to more than 8,600 customers. Tower Limited was ordered to pay a court penalty for misleading multi-policy discount claims that led to customer overcharges. ANZ Bank New Zealand Limited admitted to breaches of fair dealing laws, agreeing to pay a sum to the Crown in lieu of a penalty for wrongly applying fees and interest.

In the UK, the Financial Conduct Authority (FCA) cancelled the permissions of Able Data Services Ltd under consumer credit powers. In the US, FINRA sanctioned tastytrade, Inc. for failing to conduct reasonable best execution reviews, and sanctioned Robert Settimio Cupello for recommending unsuitable variable annuity exchanges to senior customers.

These cases illustrate a common enforcement focus on direct consumer harm, whether through overcharging, misleading information, or unsuitable advice, with outcomes including warnings, penalties, licence cancellations, and remediation.

Key Enforcement Actions

The Austrian Financial Market Authority (FMA) imposed a fine of EUR 45,000 on Kurant GmbH for breaches of due diligence obligations under anti-money laundering and terrorist financing laws. The FMA concluded these proceedings in an accelerated manner. In a separate action, the FMA fined NOTARTREUHANDBANK AG EUR 127,500 for breaches of due diligence obligations for the prevention of money laundering and terrorist financing, noting that NOTARTREUHANDBANK AG did not have appropriate strategies, controls, and procedures in place.

In New Zealand, the Financial Markets Authority (FMA) has pursued several consumer protection cases. Kiwibank received a warning for failing to apply age-based fee waivers to certain joint account customers. This resulted in overcharges of NZD 812,500 to more than 8,600 customers over 13 years. The FMA attributed this to system limitations and internal control gaps.

Other FMA actions involved non-monetary outcomes. Tower Limited was ordered to pay a court penalty for misleading representations that led to customer overcharges. ANZ Bank New Zealand Limited admitted to breaching fair dealing laws. It agreed to pay an amount to the Crown in lieu of a pecuniary penalty under an Enforceable Undertaking. The breaches included wrongly applying fees and interest for unarranged overdrafts. ANZ Bank New Zealand Limited also failed to provide required disclosure information to some customers.

The table below summarises the verified monetary penalties.

FirmRegulatorPenalty AmountBreach Type
Kurant GmbHFMA (AT)EUR 45,000Due diligence failures for AML/CFT
NOTARTREUHANDBANK AGFMA (AT)EUR 127,500Due diligence failures for AML/CFT
KiwibankFMA (NZ)NZD 812,500Overcharging due to system and control failures

Analysis

The enforcement data reveals distinct patterns in regulatory focus and common operational failures. The Financial Markets Authority (FMA) in New Zealand demonstrates a consistent approach to consumer harm, prioritising restitution and civil penalties for systemic control failures. Kiwibank was warned and faced a civil penalty of NZD 812,500 for overcharging more than 8,600 customers due to system limitations preventing correct fee waivers. Similarly, Tower Limited was ordered to pay a penalty for misleading discount representations that resulted in customer overcharges, and ANZ Bank New Zealand Limited admitted to breaches of fair dealing laws, agreeing to pay an amount to the Crown. These cases highlight a regulatory emphasis on remediating widespread consumer detriment stemming from inadequate systems and misleading information, with outcomes often combining financial penalties and enforceable undertakings to correct conduct and compensate affected customers. In contrast, FINRA's actions against US firms and individuals focus on specific suitability and procedural breaches, often without a verified monetary penalty. tastytrade, Inc. failed to conduct reasonable best execution reviews by routing all equity orders exclusively to market makers paying for order flow. Robert Settimio Cupello recommended unsuitable variable annuity exchanges to senior customers without a proper comparative analysis, and Chad M. Rogers impersonated customers to facilitate account transfers. These cases underscore failures in supervisory controls, suitability assessments, and ethical standards, with regulatory outcomes centred on disciplinary measures rather than quantified consumer redress. The comparison illustrates how FMA NZ actions frequently address quantifiable financial harm to a broad customer base, while FINRA's AWCs often target individual or firm-level misconduct that undermines market integrity and investor protection, even where a specific monetary loss is not verified.

Regulatory Implications

The enforcement actions demonstrate a clear supervisory focus on the adequacy of governance, systems, and controls as the primary defence against consumer harm and financial crime. Regulators are holding firms accountable for the operational integrity of their processes over extended periods.

For anti-money laundering, the sanction against NOTARTREUHANDBANK AG by the Austrian FMA underscores that having appropriate strategies, controls, and procedures is a non-negotiable expectation. The breach of due diligence obligations indicates a failure in the firm's foundational risk management framework.

In consumer protection, the case against Kiwibank by the FMA in New Zealand reveals that system limitations and internal control gaps, left unaddressed for 13 years, are viewed as a serious governance failing. The resulting overcharging of more than 8,600 customers shows how inadequate systems directly translate into widespread consumer detriment.

The actions against tastytrade, Inc. by FINRA for best execution failures and against Robert Settimio Cupello for unsuitable recommendations to seniors highlight that supervisory expectations extend to the rigorous, ongoing review of core business practices. These cases imply that reliance on a single commercial arrangement or a failure to conduct reasonable comparative analysis will be deemed a control failure.

Collectively, these actions signal that regulators expect firms to proactively identify and remediate weaknesses in their operational systems. Persistent gaps, whether in fee application, order routing, or client suitability processes, are likely to attract significant regulatory scrutiny and intervention, as evidenced by the FCA's cancellation of Able Data Services Ltd's permissions.

Key Takeaways

* Firms must implement appropriate strategies, controls, and procedures to meet due diligence obligations for preventing money laundering and terrorist financing.
* The FMA AT sanctioned NOTARTREUHANDBANK AG for breaches of due diligence obligations with a fine of EUR 127,500.
* Kiwibank failed to apply age-based fee waivers, resulting in NZD 812,500 in overcharges to over 8,600 customers.
* tastytrade, Inc. failed to conduct reasonable, regular, and rigorous reviews to ensure best execution for customer orders.
* Robert Settimio Cupello recommended six variable annuity exchanges to senior customers without a reasonable basis for suitability.
* Tower Limited was ordered to pay a penalty for misleading representations that resulted in customer overcharges.

About the Data

This analysis uses 11 topic-filtered actions linked to official regulatory sources across 5 regulators: FMA AT, FMA NZ, FCA, FINRA, OCC. The records cover 2025-06-04 to 2026-08-18. 3 records contain a monetary penalty verified against the evidence contract. Monetary values retain their source currency; GBP-normalised values are reserved for explicitly labelled aggregate charts. Other records may describe cancellations, prohibitions, investigations, orders or sanctions whose monetary value is not verified. The selection supports this article's analysis but is not a complete catalogue of every action in the period.

Official sources reviewed

Open the regulator material used by the editorial and regulatory review gates. RegActions analysis does not replace the official notice.