Topic 21 Conduct Of Business Standards 2 Part 2 Flashcards
What activities are covered by the Lending Standard Board (LSB)?
- Unsecured Loans
- Credit Card & Charge Cards
- Current Account Overdrafts
What are all the below in relation to the standards of lending practice?
- Consumer Credit Act 1974
- Consumer Credit Regulations 2010
- FCA’S Consumer Credit Sourcebook (CONC)
- The Equality Act 2010
What regulated firms must comply with
What key requirement of the Standards of Lending Practice is this?
Customers have access to product & Services that have been designed to take into account their circumstances
Product & Service Design
What key requirement of the Standards of Lending Practice is this?
Customers will only be provided with a product that is affordable & meets their needs
Product Sale
What key requirement of the Standards of Lending Practice is this?
Customer requests will be dealt with in timely, secure & accurate manner. Information provided will be clear & detail any action required by the customer
Account Maintenance & Servicing
What key requirement of the Standards of Lending Practice is this?
Customers will be helped to manage finances through proactive & reactive measures designed to identify areas of financial stress
Money Management
What key requirement of the Standards of Lending Practice is this?
Customers in financial difficulty will receive appropriate support & fair treatment
Financial Difficulty
What key requirement of the Standards of Lending Practice is this?
Firms are expected to have a formal strategy for dealing with vulnerable customers
Consumer Vulnerability
What key requirement of the Standards of Lending Practice is this?
Firms are expected to put in place policies & procedures that ensure customers receive a fair outcome when taking out a consumer credit product
Governance & Oversight
What is Basic Advice?
Limited form of advice that applies to stakeholder products
What are the characteristics of basic advice?
- Focuses on one of more of a clients products
- Does not involve analysis of client’s circumstances that are linked to those needs
What are Stakeholders Products?
Products covering short & long term low cost products that are lower risk and simple
Who are Stakeholders Products aimed at?
People with a lower understanding of investments or concerns about investing
Regarding Basic Advice the below is what?
- Reasonable steps have been taken to assess client’s answers to scripted questions
- Reasonable grounds for believing a stakeholder pension is suitable for the client
- Firm believes the client understands the basis upon which advice is given
When a stakeholder product can only be recommended
Basic Advice is suitable for customers when?
- Have their priority needs meet
- Have disposable income
- Don’t want holistic assessment of their financial situation
Is recommendation summary required to be given to a customer for basic advice?
Yes
For how many years must a firm keep records to show it has given basic advice?
5 years
What type of advice is this?
Advice or Information that does not relate to a particular product or investment & does not meet the characteristics of regulated advice
Generic advice
What type of advice is this?
At the request of a customer, advice & recommendations related to a specific need or investment
Focused Advice (Limited Advice)
What type of advice is this?
- Limited advice by the firm providing it to one or more of the customers needs
- Does not involve analysis of the customers circumstances (not directed related to their needs
Simplified Advice
What is a Robo Advice?
Advice provided with minimal customer interaction
Why would Robo Advice be attractive to some people?
Low costs of service
True or False
There is a degree of self regulation in regards of standards of lending practice
True
According to MCOB 3A: Financial Promotions & Communications with customers how long should record of non-real time financial promotions be kept for?
12 months
Commited Expenditure is classed as?
Repayments on credit agreements & other contractual arrangements
The below are what type of expenditure?
- Food
- Housekeeping costs
- Utilities
- Telephone
- Council Tax
- Building Insurance
- Ground Rent & Service Charges
- Essential Travel
Basic Expenditure
