Its the first time Bank of England has fined a financial market infrastructure firm

A Mastercard-owned company behind UK payments, including salaries, has been fined £11.9 million by the Bank of England for failing to comply with orders to improve its risk management and governance framework.

Vocalink fell short of its obligations and failed to comply with directions from the Bank, it said on Wednesday, in what is the first time the Bank has ever fined a financial market infrastructure firm.

The fine was reduced from £20 million due to Vocalink admitting to the failures and agreeing to resolve the matter.

Vocalink, which is owned by US payments giant Mastercard, says it processes more than 90% of salaries, 70% of household bills, and 98% of state benefit payments in the UK.

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It comes after banking firm Monzo was fined on Tuesday, July 8, over £21 million by the Financial Conduct Authority (FCA) after they allowed customers to register accounts to “implausible” addresses such as Buckingham Palace and No 10 Downing Street.

The UK’s financial watchdog said the fine related to failures regarding anti-financial crime measures dating back to between October 2018 and August 2020.

For example, it found customers were allowed to register bank accounts using addresses such as PO Boxes, foreign addresses with UK postcodes, or well-known London landmarks.

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Octopus Energy is also paying out £1.5 million to customers in refunds and compensation after it failed to give out bills quickly enough, Ofgem has said.

More than 34,000 of Octopus’ prepayment meter customers did not receive final bills within six weeks between 2014 and October 2023, as required under Ofgem’s rules in order to give customers a clear indication of their final debit or credit position.

It comes after E.ON Next self-reported the same error to Ofgem last year – which led to the regulator discovering the error with Octopus.

An average of £43 per affected customer will be paid by Octopus, which had agreed to pay a total of £1.483 million in compensation and redress in recognition of the impact the issues may have had, particularly on those who may be vulnerable, Ofgem said.

This included refunds of £231,000 of credit that was remaining on accounts when they were closed, and a further £1,250,000 in compensation to affected customers.

Sarah Breeden, Deputy Governor for Financial Stability, said: “Vocalink fell short of its obligation to have adequate risk management and governance arrangements when responding to the Bank’s Direction. Its failure to comply with that Direction in full has resulted in a significant fine.”

A spokesman for Vocalink said it was “pleased to resolve this matter which related to issues identified in 2020”.

“Since then, we’ve delivered a number of improvements,” the firm said.

“The historic issues related to internal systems and controls and had no impact on the service we delivered to the UK’s consumers and businesses.”