Complaints and Redress

Question 1

Why is Redress important? (3)

Answer 1

• Not all businesses have access to seek redress through the courts
• FCA/RDC act as a sanctioning body and ensures that complaints are handled appropriately by firms
• The FCA itself DOES NOT award compensation

Question 2

What is financial loss? (2)

Answer 2

• Actual loss
• Prospective loss (not yet crystallised because of the type of product involved e.g. pension, endowments)

Question 3

What is the internal complaints procedure? (5)

Answer 3

• Must be in writing (even though complaints can be verbal)

1. Receiving complaints
2. Responding to complaints
3. The appropriate investigation of complaints
4. Notifying complainants of their right to escalate complaints to the FOS

Question 4

How must the complaints procedure be available? (3)

Answer 4

• Customers must be made aware of the availability of the FOS at first point of contact
• Sent to customers on request
• Sent to complainants automatically when a complaint is received

Question 5

Who is responsible for the implementation of the complaints procedure? (2)

Answer 5

• All employees that deal with customers
• All appointed representatives

Question 6

What are the requirements for investigating a complaint? (3)

Answer 6

• Complaints are investigated promptly and fully
• The person has the correct authority to settle the complaint
• Appropriate redress is issued

Question 7

What are the time constraints on handling a complaint? (3)

Answer 7

• Immediate written acknowledgement and copy of complaints procedure should be sent
• 8 weeks max. from the receipt of complaint to resolve it
• After 8 weeks, firm must send a final response 1) explain that it will not give a final decision 2) give a final decision and explain that they can refer the complaint to the FOS and attach FOS leaflet

Question 8

How long must complaints be kept on record for? (2)

Answer 8

• 5 years for MiFID
• 3 years for non-MiFID

All from the date of receipt

Question 9

What should complaints records include?

Answer 9

• Name of the complainant
• Substance of the complaint
• Correspondence between the firm and complainant
• Detail of any offered redress/outcome

Question 10

Within what time period must the complainant refer the complain to the FOS? (3)

Answer 10

• Within 6 years of the event occurring OR
• Within 3 years of the customer knowing of the event
• Within 6 months of the firms final response

Question 11

When is a complaint considered ‘closed’? (3)

Answer 11

• The firm has sent a final response
• The claimant has accepted the firms response
• The complainant has not responded within 8 weeks of the firms final response

Question 12

On what grounds can a complaint be dismissed by the FOS? (3)

Answer 12

• No financial loss, pain or suffering, damage to reputation, or inconvenience caused
• Complainant is vexatious
• The firm already offered reasonable compensation

Question 13

What is the FOS investigative process? (5)

Answer 13

• Mediation between the firm and the complainant
• If this is not possible, the FOS will investigate the complaint
• The FOS will determine an outcome
• If complainant is unsatisfied with the complaint, they can escalate this to the courts
• If they accept the FOS determination, it becomes binding on the firm

Question 14

What is the Pension Ombudsman Service?

Answer 14

Responsible for handling complaints relating to personal or occupational pension schemes and how they are run

Question 15

What are some examples of pensions complaints?

Answer 15

• Taking too long to do something without good reason
• Not making a decision the right way
• Giving incorrect or misleading information
• Not following rules or law

Question 16

Who is the FSCS for? (4)

Answer 16

• Primarily retail clients
• Limited claims can be made for professional clients and eligible counterparties in respect of insurance losses
• Claims can be made for investment and deposits
• Scheme is overseen by the FCA for investors who have a claim in the event of insolvency of an authorised firm

Question 17

What’s the maximum award the FSCS offers? (4)

Answer 17

• Each person gets an £85,000 limit.
• Life annuities and pensions, 100% of the claim is covered
• If there’s a joint accounts, £120,000 is protected
• For the scheme as a whole, total payout is unlimited

Question 18

Within what time can a client make a claim to the FSCS?

Answer 18

Within 6 years of the event occurring

Question 19

Who are the eligible claimants? (2)

Answer 19

• Retail clients - individuals and small businesses
• Authorised firms cannot be eligible claimants unless they are small companies e.g. sole trader and claim arises out of a regulated activity that they do not have much experience of

Question 20

Who funds the FSCS?

Answer 20

• Authorised firms similarly to how the FCA is funded

Question 21

What is the maximum award from the FOS?

Answer 21

£415,000

Question 22

When should a complaint be made to the Pension Ombudsman? (3)

Answer 22

• Within 3 years of when the event occurs OR
• Within 3 years of the complainant knowing about it
• All final decisions are legal, binding and enforceable in court