Dirty Business, Dirty Regulation: Is There Any Real Difference Between the Environment Agency and the FCA?

Watching Dirty Business is enough to make your blood boil. Not just because of what it says about the water industry, but because of what it appears to expose about the regulator that was supposed to keep it in check.

And the more you watch it, the harder it becomes to ignore the obvious question… are we really looking at an environmental scandal alone, or are we looking at the same regulatory disease that has infected financial services for years?

Because once you strip away the sewage pipes and replace them with finance agreements, the parallels with the FCA and, by extension, the FOS, are not just striking. They are damning.

The Environment Agency has long been criticised for relying on operator self-monitoring. In plain English, that means regulated firms are trusted to report on their own compliance, their own breaches and, too often, the scale of their own wrongdoing.

Sound familiar?

Because that is exactly the smell coming off the FCA’s handling of the motor finance commission scandal. The watchdog banned discretionary commission in 2021, but only after the market had already been allowed to fester. Since then, the public face of the response has been review, pause, consultation, more pause, and now a watered down compensation scheme, all after the scandal was already in full flow.

That is not proactive regulation. That is turning up after the building has burned down and asking whether a consultation should be launched into the temperature of the flames.

But Dirty Business goes further than mere regulatory laziness or weakness. One of the most chilling suggestions in the series is that criminality had effectively been built into the water companies’ business models. Not as a one-off lapse. Not as the work of a few bad apples. But as a commercial strategy where breaking the rules, cutting corners and risking unlawful conduct was simply part of the profit calculation.

And that is where the comparison with banking becomes deeply uncomfortable.

Because it is becoming increasingly difficult to argue that parts of the banking sector have not adopted much the same approach. When unlawful or unfair conduct becomes widespread, persistent and highly profitable, it stops looking accidental. When firms design sales models, commission structures and complaint handling processes in ways that maximise revenue first and worry about legality later, that is not a compliance failure. That is a business model.

And in motor finance, that is exactly what this scandal risks exposing.

Discretionary commission was not some obscure technical glitch. It was a system that allowed brokers and dealers to increase the interest rate paid by consumers in order to increase commission. It created a direct financial incentive to overcharge. That is not a minor oversight. That is the industrialisation of consumer harm.

And even now, the response tells its own story. There have been no headline-grabbing personal consequences for senior executives. No sense that those at the top who presided over unlawful conduct are being pursued with anything like the seriousness the scandal deserves. Instead, the debate has largely centred on the cost of redress, the impact on firms, and how to manage the fallout.

In other words, exactly the sort of response you would expect where wrongdoing is not treated as an aberration, but as something the system is quietly built to absorb.

Then there is the money.

The FCA is funded by the firms it regulates. The FOS is funded by the industry too. And while the Environment Agency is structured differently, it is likewise not immune from the distortions that come from being financially entangled with the sectors it oversees.

Now, that does not automatically prove corruption. But it does create the kind of dependency that breeds timidity, caution and institutional self-preservation. It creates regulators that talk tough in public while acting delicately in practice. Regulators that become obsessed with “stability”, “proportionality” and “market confidence” just as ordinary people are discovering they have been ripped off, poisoned, ignored or fobbed off.

And what happens when somebody points this out?

In Dirty Business, the whistleblower is not portrayed as being welcomed with gratitude and urgency. Quite the opposite. The picture painted is of an organisation more interested in containing the problem than confronting it. That, again, feels painfully familiar. In financial services, the establishment line is rarely, “Consumers need expert help against powerful firms.” It is usually, “Do they really need representation?” The push is always toward keeping people inside a system that the institutions already understand, already dominate, and already know how to game.

That is one of the grimmest similarities of all. Both systems start to look less like avenues of accountability and more like closed loops of managed dissent. Whistleblowers are inconvenient. Professional representatives are inconvenient. Independent scrutiny is inconvenient. What is always preferred is a quieter victim, a cheaper complaint, a softer challenge.

Then there is the revolving door problem, the broader and deeply corrosive culture in which regulators and regulated sectors become part of the same professional ecosystem. The result is not always overt misconduct. Often it is worse… shared assumptions, shared language, shared instincts and shared loyalties. Eventually, the regulator stops seeing itself as a public shield and starts behaving like an industry risk manager.

That is when enforcement dies.

Look at the contrast between the scale of the motor finance scandal and the visible response. The public has seen consultations, pauses and reduced compensation proposals. What it has not seen is a ferocious display of executive accountability that matches the seriousness of the wrongdoing.

And that is the heart of it.

When unlawful conduct on an industrial scale leads not to personal accountability at the top, but to carefully managed remediation architecture, the message is unmistakable. If you are big enough, important enough, or politically awkward enough to challenge, the state will manage your scandal rather than punish it.

That is how public trust collapses.

The Environment Agency was supposed to protect the environment, yet Dirty Business leaves viewers asking whether it became too close, too passive and too compromised to do the job properly. The FCA was supposed to protect consumers and market integrity, yet in motor finance it has looked slow, cautious and acutely aware of the consequences for firms. The FOS, meanwhile, increasingly risks looking less like an independent route to justice and more like an overstretched appendage in a system trying to keep a lid on the fallout.

So is there any real difference between the Environment Agency and the FCA or FOS?

Yes, on paper.

In practice, the similarities are becoming impossible to ignore.

All three sit uncomfortably close to the industries they oversee. All three appear vulnerable to the logic of self-reporting, self-regulation and institutional caution. All three give the impression that scandal must become impossible to deny before meaningful action begins. And all three leave the public asking the same bleak question: are these watchdogs, or are they just damage-limitation departments with logos?

Because that is what this really comes down to.

A regulator that waits for catastrophe is not regulating.
A regulator that leans on firms to explain their own misconduct is not regulating.
A regulator that treats whistleblowers and professional challengers as the problem is not regulating.
A regulator that shrugs while criminality or unlawfulness is baked into a business model is not regulating.
And a regulator that protects the system from the consequences of wrongdoing more energetically than it protects the public from the wrongdoing itself has ceased to be a watchdog at all.

It has become part of the business model.