Redress

Question 1

Do financial losses have to have occurred to seek redress?

Answer 1

No, but there must be future losses

Question 2

What do FCA rules state on redress?

Answer 2

A firm must have written procedures to ensure complaints from eligible complainants are properly handled

Question 3

How is a complaint defined?

Answer 3

Any oral or written expression of dissatisfaction (whether justified or not) from or on behalf of a person, about the provision of, or failure to provide financial service which alleges the complaint has or may suffer, financial loss and or material stress or inconvenience.

Question 4

Who or what are types of eligible complainant

Answer 4

• Consumer
• smaller business - fewer than 10 employees and turnover or annual balance sheet not exceeding £2,000,000 (called a ‘micro-enterprise’
• A charity with annual income of less than £1,000,000
• A trust with net asset value of less than £1,000,000

Question 5

What is an eligible complainant?

Answer 5

a person eligible to have a complaint considered under the Financial Ombudsmen Service

Question 6

For mifid business, to what do complaints handling and record rules to apply to?

Answer 6

• Complaints from retail clients, but not those who are not retails client
• Activities carried on from a branch of a UK firm in another EEA state, but not to activities carried on from a branch of an EEA firm in the UK
• If a firm takes responsbility for activities outsourced to a third party processor, the firm is responsible for dealing with complaints about those activities

Question 7

To whom do the rules about eligible complainants not apply to?

Answer 7

Authorised professional firms (e.g. accountants or solicitors) in respect of their non-mainstream regulated activities

Question 8

What must firms do in order to aid the consumer awareness of the complaints protection offered?

Answer 8

• publish a summary of their internal processes for dealing with complaints promptly and fairly
• refer eligible customers in writing to this summary at, or immediately after, the point of sale
• provide the summary on request, or when acknowledging a complaint

Question 9

UK firms and EEA branches, must have established procedures for the reasonable handling of complaints which do what?

Answer 9

• are effective and transparent
• allow complaints to be made by any reasonable means (which might include email, or phone)
• recognise complaints as requiring a resolution

Question 10

In respect of mifid and non mifid business what must firms to about complaints?

Answer 10

Non-mifid business - ensure they identify recurring or systematic problems revealed by complaints
-mifid business - use complaints info to detect and minimise the risk of ‘compliance failures’

Question 11

What must a firm do for all complaints received?

Answer 11

• investigate the complaint competently, diligently and impartially
• Assess fairly, consistently and promptly, regardless of whether the complaint should be upheld, what remedial action or address might be appropriate and whether another respondent may be responsible for the matter (by the complaints forwarding rule, the complaint should be forwarded to that firm and explain why to the client
• offer any redress or remedial action
• Explain the firms assessment of the complaint to the client, its decision, including any offer of redress or remedial action made- in a fair, clear and not misleading way.

Question 12

What factors are relevant when assessing a complaint?

Answer 12

• All available evidence and circumstances
• Similarities with other complaints
• Guidance from the FCA, FOS or other regulators

Question 13

With regards to resolving complaints, what should a firm try to do?

Answer 13

resolve complaints asap, minimising the number of unresolved ones referred to the FOS, with whom the firm must co-operate fully, complying with any settlement or award

Question 14

If complaints are dealt with by the next business day, what no longer applies?

Answer 14

The complaints time limit, forwarding and reporting rules

Question 15

What are the time limit rules with regards to complaints?

Answer 15

On receiving a complaint a firm must

• send to the complainant a prompt written acknowledgement (no time limit is specified) providing ‘early reassurance’ that it have received the complaint and is dealing with it
• ensure the complainant is kept informed of the progress regarding a resolution.

By the end of 8 weights after receiving a complaint which isn’t resolved a firm must

• send a final response or
• a holding repsonse, which explains why final response can’t be made and provides expected time it will be, informs complaint of his right to complain directly to the FOS if he is not satisfied with the delay and encloses a copy of the FOS explanatory leaflet

Question 16

What happens to complaints received outside of FOS time limits?

Answer 16

It may be rejected without considering their merits in a final response but it should be noted this may be waived in exceptional circumstances

Question 17

How long must complaints be kept for?

Answer 17

5 years for mifid

3 years for other complaints

Question 18

How frequently must a firm provide a report to the regulator on complaints received?

Answer 18

twice a year

Question 19

What must the complaints report sent to the regulator show?

Answer 19

• complaints should be broken down into categories and generic product types
• numbers of complaints closed by the firm, within four weeks, 8 weeks and more than 8 weeks
• numbers of complaints upheld, known to have referred to and accepted by FOS. Those outstanding at both the beginning and end of the reporting period
• Total amount of redress paid in respect of complaints

Question 20

What is the structure and accountability of the FOS?

Answer 20

set up by statute with its board appointed by the FCA, however it is independent from the regulator and authorised firms. However it is accountable to the regulator and must make an annual report on its activities.

The board is all non-exec so have no involvement with individual complaints

Question 21

What is the Compulsory jurisdiction of the FOS?

Answer 21

FOS can consider complaints against authorised firms for an act or omission in carrying out regulated activities as well as any ancillary services