Regulation Chapter 5 Flashcards
Purpose of the Complaints rules
Deal with complaints from ‘eligible complainants’ (eligbible to approach the Financial Ombudsman Service promptly and fairly)
Eligible Complainants are..
Eligible Complainants are… Retail Clients that are:
- consumers: persons using the services of an authorised firm
- micro-enterprises: persons (irrespective of legal form) engaged in business, employing fewer than 10 persons and having turnover or balance sheet not exceeding e2M
- charities with annual income <1Mpounds
- Trustees of a trust, with net assets of <1Mpounds
- certain SMEs: turnover <_6.5Mpounds and balance sheet assets <_5Mpounds, OR <50 employees
Procedures of complaints
Firms must have….
Firms must have… appropriate written procedures for:
- receiving/responding to/investingating complaints
- notifying complainants of their right to approach the Financial Ombudsman Service
Stages and Timings of a complaint process
on receiving a complaint, the firm has to send…
By the end of ….., the firm has to send…
How long does that compainant have to wait to go to the FOS?
…. written acknowledgement (early reassurance) that they have received it and are looking into it.
…. ensure complainant is kept informed thereafter
By the end of 8 weeks, the firm has to send:
- a final response or
- a holding response (and inform the complainant of their right to approach the FOS within 6 months)
8 WEEKS max
Record Keeping and Reporting
records of complaints should include:
Reporting:
- name of the complainant
- substance of the complaint
- details of correspondence between the firm and the complainant
The firm must provide a report (summary report, how many went to FOS etc) to the FCA on complaints received TWICE A YEAR
Payment Services Regulations (PSDs) and/or Electric Money Directive (EMD)
Payment service firms (including some banks) must submit a……
… that details the number of ….
Firms involved in the provision of payment services face different complaint-handling timescales.
Payment service firms (including some banks) must submit a… SEPERATE ANNUAL RETURN to the FCA about complaints about payment services. They need to detail the number of:
- complaints opened
- complaints closed in fewer than 3 business days
- complaints closed in more than 3 business days
- complaints closed in more than 15 business days and within 35 business days
- complaints closed in more than 35 business days
- complaints closed in more than 8 weeks
The Financial Ombudsmand Service (FOS)
Role
FOS Awards
Role
- free to compliants
- designed to resolve complaints about financial services firms quickly
- eligible compliants only
Awards
- FOS can award compensation (to the firm) for loss, pain and suffering, damage to reputation and distress or inconvenience
- maximum award (what the retail client can get): 350,000 pounds (complaints received after 1st April 2019). Effective from April 2020, the FOS’s compensation limits can be adjusted in line with inflation
Financial Services Compensation Scheme (FSCS)
purpose
Eligible Claimants are….
purpose
- pay compensation to ‘eligible claimants’ in the event of a DEFAULT by an authoried firm
Eligible Claimants are…. most clients of the defaulting firm except:
- Eligible counterparties, CIS (and their trustees and operators)
- large companies, partnerships, mutual associations
- directors and managers of the defaulting firm
- companies in the same group as the defaulting firm
- persons holding >5% of the defaulting firm’s capital
- auditors of the defaulting firm
- any person who has contributed to the firm’s default
Financial Services Compensation Scheme (FSCS)
Compensation payable scheme limits:
scheme limits:
- deposits: 85,000pounds (170,000pounds for joint accounts)
- investments: 85,000pounds
- home finance: 85,000pounds
- insurance: 100% of the claim with NO upper limit
