Your commercial news round-up: Booking.com fraud, Citibank fines, Anthropic and Poundland’s return to £1 pricing

Anna O’Boyle is acting senior content and engagement coordinator at LawCareers.Net

Reading time: four minutes

Booking.com has come under scrutiny after Which? was able to create a live listing for 10 Downing Street, prompting comments from UK communications regulator Ofcom. In other news, Citibank’s London branch faces fines of £4.7 million after breaching sanctions imposed on Russian bank accounts, while Anthropic admits its AI models behaved in ways “misaligned” with human values. Meanwhile, discount retailer Poundland is seeking a new owner after being bought by Gordon Brothers for £1 last June.

Read on for LawCareers.Net’s pick of this week’s top commercial stories.

• Booking.com has been accused of “systemic security failures” after consumer watchdog Which? created a fake listing for Number 10 Downing Street. Which? said Booking.com processed payment for a week-long stay booked by one of its researchers, with the money still not refunded more than six weeks later. Despite a moderation warning, researchers also uploaded a fake review, mentioning “hanging out with Larry the cat”, which appeared online almost immediately. Which? said it was also able to send an external link requesting credit card details through Booking.com’s messaging system. Which? said the investigation highlighted weaknesses in Booking.com’s fraud and security controls and urged Ofcom to investigate. An Ofcom spokesperson confirmed online platforms have legal duties obliging them to remove fraudulent or illegal content posted by users as soon as they’re made aware of it. Despite this, the fake listing remained live on Booking.com for around six weeks before being removed.

• Citibank’s London branch has been fined £4.7 million by the UK Treasury’s Office of Financial Sanctions Implementation (OFSI) after an investigation found the bank processed payments involving sanctioned Russian accounts. 970 payments worth £19.7 million were deemed to have breached financial sanctions, with most of the transactions taking place between February and November 2022, following Russia’s invasion of Ukraine. OFSI said errors in payment processing, account operations and correspondent banking services allowed sanctioned entities to access funds and make payments that should have been restricted. The regulator recognised there was “no intention” to undermine the imposed sanctions, but concluded the breaches “significantly undermined” their effectiveness. The fine was reduced by 40% after Citi voluntarily reported most of the breaches and agreed to a settlement. A spokesperson for Citi said the London branch had co-operated with OFSI throughout its investigation and was “pleased to conclude this matter”.

• Anthropic has admitted that a series of hacking incidents involving its AI models were caused by a “failure of operational security”. The company revealed that its models had accessed the open internet and compromised the systems of three unnamed organisations during testing, going on to acknowledge that its technology is “not perfectly aligned” with human values. Anthropic said the models were being tested without cybersecurity safeguards and gained internet access because of a misunderstanding with an external testing company, leading Alan Woodward, professor of cybersecurity, to claim Anthropic had admitted “its factory was running faster than its quality control”. The company paused internal and external cybersecurity testing while introducing additional safeguards, including alerts when models gain internet access and new safety requirements for external testing partners. Anthropic said it had since resumed testing and found that defective training setups were a significant contributor to “misaligned behaviour”. Reporting from July found that incidents of AI models operating beyond users’ control hit a new high, almost doubling compared with the previous month.

• After buying the business for £1 in June last year, Poundland’s owner, Gordon Brothers, has launched a sales process for the company and hopes to secure a deal within weeks. Corporate advisory firm Alvarez & Marsal has been appointed to oversee the sale and approach potential buyers. Reports claim Modella, the owner of TG Jones and Hobbycraft, is among the parties that have expressed interest. The move follows a major restructuring programme aimed at addressing losses and weak consumer demand; under Gordon Brothers’ ownership more than 100 UK stores were closed in an effort to simplify the business. Poundland has also overhauled its pricing strategy, reintroducing £1, £2 and £3 grocery pricing across UK stores alongside simpler pricing for clothing and general merchandise. The company said it remains focused on its recovery plan, which includes lower prices, new product ranges and improved customer service.

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