Topic 25 Consumer Rights, Complaints & Compensation Flashcards
1
Q
The below are what in relation to consumer rights legislation?
- Clear & honest information before they buy
- Get what they paid for
- Be supplied with goods that are fit for purpose & services that are performed with reasonable care & skill
- Have any faults corrected free of charge, or get a refund/replacement
A
Key Consumer Rights
2
Q
When did the Consumer Rights Act come into effect?
A
1st October 2015
3
Q
The below are what in relation to Consumer Rights Act 2015 (CRA)?
- What to do when goods are faulty
- What should happen when digital content is faulty
- How services should match up to what has been agreed & what should happen if they are not
A
What the Consumer Rights Act (CRA) covers
4
Q
The below are what in relation to Consumer Rights Act 2015 (CRA)?
- What should happen when goods & services are not provided with reasonable care/skill
- Unfair terms in contracts
- Greater flexibility such as the FCA & training standards to respond to breaches of consumer law
A
What the Consumer Rights Act (CRA) covers
5
Q
The Consumer Rights Act (CRA) was the first consumer rights legislation to detail what should happen if a service is not provided with reasonable care and skill.
True or False
A
True
6
Q
What is the purpose of the Alternative Dispute Regulation (ADR)?
A
- Reduce the number of disputes between businesses & consumers ending in court action
- Improved speed which disputes are resolved
- Costs of disputes reduced
7
Q
How does a business go about resolving a dispute?
A
Approach the services of a certified alternative dispute resolution provider
8
Q
When approaching a certified alternative dispute provider the business must find out whether or not the customer is willing to use the service.
True or False
A
True
9
Q
What Alternative Dispute Resolution (ADR) is this?
Decisions can be appealed through courts.
A
Adjudication
10
Q
What Alternative Dispute Resolution (ADR) is this?
Decisions cannot be appealed through courts
A
Arbitration
11
Q
The below are what in relation to Alternative Dispute Resolution (ADR)?
- Based on information provided by both parties
- Binding on both parties
- Can be enforced by courts
A
Decisions
12
Q
The legislation in relation to Unfair Contract Terms covers what?
A
- Fairness
- Transparency
- Good Faith
13
Q
Which legislation in relation to Unfair contact terms is this?
- All terms of the contract be fair
- All terms must adhere to the requirement of food faith
- Any unfair term or notice will not be binding on the customer (unless they choose to be bound by it)
A
Fairness
14
Q
All the below are what in relation to fairness?
- Disproportionately high charges where the customers decides not to proceed with services yet to be provided
- Terms allowing the business to determine subject matter after the customer is bound
- Terms allowing the business to determine the price after the customer is bound
A
Terms that are deemed unfair
15
Q
Which legislation in relation to Unfair contact terms is this?
Written terms of a contract should be transparent & expressed in clear, easily understood language.
A
Transparency
16
Q
If there is any doubt about the meaning of a written term who’s interpretation is adopted?
Customers or Business?
A
Customers
17
Q
Which legislation in relation to Unfair contact terms is this?
Term that causes a significant imbalance between the rights & obligations of the various parties to the contract to the detriment of the consumer will be deemed a breach of good faith
A
Good Faith
18
Q
The below are what in relation to consumer contacts?
- Request that a firm amend or remove an unfair contract term from it’s future consumer contracts
- Prevent a firm imposing the terms against existing customers
A
How the FCA can challenge unfair terms
19
Q
To prevent a firm imposing the terms against existing customers what does the FCA need to do?
A
Appeal to a court for an injunction
20
Q
The below is what in relation to the FCA’s handbook what section does it cover?
- Firms should take into account consumer’s legitimate interests in relation to contracts
- Fairness is not contrary to the Prudential management of a firm but part of it
- Focusing on narrow technical arguments to justify a contract term maybe unfair
A
Unfair Contract Terms & Consumer Notices Regulatory Guide (UNFCOG)
21
Q
The below is what in relation to the FCA’s handbook what section does it cover?
- Schedule to the CRA & UTCCR’s each contain an indicative & non-exhaustive list of terms that maybe regarded as unfair
- Firms should take into account developments in legislation & relevent case law concerning the fairness & transparency of terms in consumer contracts
A
Unfair Contract Terms & Consumer Notices Regulatory Guide (UNFCOG)
22
Q
The below are all examples of what?
- Legislation
- Ombudsman bureau & other arbitration schemes
- Voluntary codes of practice
- Compensation Schemes
- Consumer bodies
A
Consumer Protection
23
Q
Regarding consumer protection the FCA lists that it cannot do what?
A
- Cannot protect investors from falls in the stock market
- Sets limits on the amount of compensation from the Financial Services Compensation Scheme (FSCS)
24
Q
Which government department has these responsibilities?
- Maintaining control over public spending
- Working to achieve stronger & sustainable economic growth
- Responsible for regulation of financial services under the authority of the chancellor
A
HM Treasury
25
Which government department has these responsibilities?
- Collects money that pays for UK's public services
- Helps individuals with targeted financial support
- Deal with individuals who require self assessment
- Pension providers also have dealings to reclaim tax taken at source
HM Revenue & Customs (HMRC)
26
Which government department has these responsibilities?
- Responsible for welfare, pensions & child maintenance
- Administers state pension
- Adminsers working age, disability, Ill health benefits
The Department for Work & Pensions
27
Which government department has these responsibilities?
- Protect members of the public by disrupting & being to justice organised criminals
- Tackles money laundering, fraud, bribery & corruption
National Crime Agency (NCA)
28
The below services have been brought together to make what service?
- Money Advice Service
- The Pensions Advisory Service
- Pension Wise
The Money & Pensions Service (MaPS)
29
The Money & Pensions Service (MaSP) is sponsored by the Department for Work & Pensions?
True or False
True
30
What is the aim of the Money & Pensions Service (MaPS)?
Help individuals manage their personal finances
31
The below are what in relation to The Money & Pensions Service (MaPS)?
- Pensions Guidance
- Debt Advice
- Money Guidance
- Customer Protection
- Strategy
5 functions of The Money & Pensions Service (MaPS)
32
What does Which? do?
- Protect consumer rights
- Review products & service
- Offers independent advice on variety of subjects
33
What does Citizens Advice do?
- Offer free, confidential & independent advice to help people overcome their problems
34
Both Which? & Citizens Advice have "Super-Complaint" status but what does it mean?
Can make complaints straight to the FCA
35
Where are the rules for dealing with complaints & compensation set out?
- Dispute Resolution Handbook (DISP)
- Compensation Handbook (COMP) **rules governing eligiblity under Financial Services Compensation Scheme (FSCS)**
36
What is this is relation to a complaint?
- Financial Loss
- Material Distress
- Material Inconvenience
What the FCA defines as a compliment
37
A private individual is eligible to complain according the FCA but what about the below?
- Personal guarantors for a loan to businesses
- Consumer Buy to Let businesses
Yes they are also eligible
38
For a business with an annual turnover below £6.5 Millon to be eligible to complain it must also what?
- Fewer then 50 employees
- Annual balance sheet of below £5 million
39
To be eligible to complain according to the FCA a charity must have an annual income of less than £6.5 million when a complaint is made?
True or False
True
40
To be eligible to complain according to the FCA a trustee of a trust must have an annual income of less than **£5 million** when a complaint is made?
True or False
True
41
To be eligible to complain according to the FCA what is the maximum turnover or annual balance sheet for a micro- enterprise with 10 employees or less
True or False
£2 Million
42
Which stage of the complaint handling process is this?
Acknowledge receipt of a complaint promptly in writing
Acknowledge
43
Which stage of the complaint handling process is this?
Ensuring complaints are investigated by a person of sufficient competence (ideally someone not involved in the complaint)
Investigate
44
Which stage of the complaint handling process is this?
Aim to resolve complaints promptly **within 8 weeks**
Resolve
45
Which stage of the complaint handling process is this?
Keep the complaint informed on progress
Inform
46
Which stage of the complaint handling process is this?
Advise the customer that they can refer the matter to the Financial Ombudsman Service (FOS) where a solution cannot be found within **8 weeks**
Advise
47
Which stage of the complaint handling process is this?
Provide the complaint with a final response letter & notify the complaints of their right to approach the FOS within 6 months of the letter if they are not satisfied
Provide
48
Within how many days must a payment service provider give full response to a complaint by?
15 days
49
What is the most number of days a payment service provider can delay a response to in exceptional circumstances?
35 days
50
How often does a firm need to report to the FCA on their complaints handling business?
6 monthly basis
51
A firm must appoint a individual at the firm to be responsible for the oversight of the firms compliance with complaints rules.
True or False
True
52
Minor complaints such as rudeness by a staff member or misspellings on communications can normally be resolved by when?
Close or business on the 3rd day following it's receipt
53
Does a firm need to provide a final response letter following a minor complaint?
No but they need to provide a summary resolution to a customer
54
What is Root Cause Analysis?
When a firm reviews it's management control to try and avoid complaints of the same nature reoccurring
55
What is the maximum period a firm must keep records of it's complaints?
3 years
56
Where a complaint relates to collective portfolio management in a UCITS scheme how long do records need to be kept?
5 years
57
Where a complaint relates to MiFID business how long do records need to be kept?
Minimum of 5 years with a maximum of 7 years
58
What are the below in relation to a firm's responsibility to report complaint from the last 6 months to the FCA?
- Total number of complaints received
- Total number of complaints closed
- Total number of complaints
- Total amount of redresses paid in respect of complaints during the reporting period
- Root cause of complaints & corrective action taken to prevent recurrence
What must be on the report to the FCA every 6 months
59
When a consumer body makes a super compliant to the FCA how long does the FCA have to respond to the complaint?
Within 90 days
60
What are these in relation to the FCA response to super complaints?
- Announce plans to consult on an issue
- Set out timeline for regulatory action
- Explain how the FCA is already taking action to address an action
- Explain why it is taking action
Likely responses to Super-Complaints
61
How does the Financial Ombudsman Scheme (FOS) work?
A team of adjudicators & assessors aim to investigate & resolve cases
Senior management (Ombudsman) then make the final decision
62
Does a consumer have the right to take their case to court if they don't agree with the Financial Ombudsman's decision?
Yes they can
63
How is the Financial Ombudsman Service (FOS) funded?
General levy on members for which all firms must have **compulsory** memberships
64
What are these in relation to the Financial Ombudsman Scheme (FOS)
-Within 6 months of receiving a complaint
- 6 years of the event that lead to the complaint
- Within 3 years of the time when the complaint had cause for complaint
When a consumer should make a complaint to the Financial Ombudsman Service (FOS)
65
What is a "Time Barred Complaint"?
A complaint make outside the time limits for a referral to the Financial Ombudsman Service (FOS) which a firm must reject
66
What are the compensation limits set by the Financial Ombudsman Service (FOS)?
Set
67
What does the Pension Ombudsman Service (POS) do?
Deals with complaints about person & occupational pension schemes. Also complaints to the Pension Protection Fund (PPF)
68
Does the Pension Ombudsman Service (POS) deal with complaints to the about the sale & marketing of pension schemes?
No these are covered by the Financial Ombudsman Service (FOS)
69
When must a complaint to the Pension Ombudsman Service (POS) be made?
Within 3 years of the event being complained about
70
Who appoints the Ombudsman for Pensions?
Secretary of State for Work & Pensions
71
Can a consumer who makes a complaint to the Pension Ombudsman Service (POS) take their complaint to court if they disagree with the Pension Ombudsman's decision?
No they are binding on all parties
72
Who is responsible for the rule making & oversight of the Financial Services Compensation Scheme (FSCS)?
The PRA & FCA
73
How is the Financial Services Compensation Scheme (FSCS) funded?
Levies on firms authorised by the FCA & PRA
74
What are these in relation to the Financial Services Compensation Scheme (FSCS)?
- Compensation can only be paid when an authorised firm is in default
- Compensation can only be paid for financial loss & there are limited to amount of compensation payable
- Set up mainly to assist private individuals (smaller business are covered)
- Does not cover firms in CIIOM
How a claimant is eligible under the Financial Services Compensation Scheme (FSCS)
75
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
- Covers failed deposit taking firms
- Triggered when a firm authorised to accept deposits by the PRA goes out of business
Deposits
76
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
- 100% of £85,000 per person
Maximum Claim for Deposits
77
The cover up limit of £1 Million for the Financial Services Compensation Scheme (FSCS) sub scheme for Maximum Claims applies to balances held for how long?
Less than 6 months
78
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
Customers with money held by debt management firms maybe covered in relation to client money held with a failed debt management firm of up £85,000 per person
Debt Management
79
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
Customers with money held by debt management firms maybe covered in relation to client money held with a failed debt management firm of up £85,000 per person
Debt Management
80
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
FSCS authorised to advise on or arrange investments goes out of business
Investments
81
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
- FSCS can provide protection if a mortgage firm is unable or unlikely to pay claims against it
- FSCS is triggered when a firm that advises or arranges mortgages goes out of business
Home Finance
82
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
Covers claims that arise following the failure of an authorised insurance (life & general)
Insurance Companies
83
What is the maximum compensation amount for long term & general insurance that provide benefits on death/disability only?
100% of the policy
84
What is the maximum compensation for a long term policy including savings in addition to a protection element?
100% of the policy
85
What is the maximum compensation for an Annuity that also provides an income?
100%
86
Compulsory insurance such as employer's liability cover or motor insurance has what compensation limit?
100%
87
Which sub scheme of the Financial Services Compensation Scheme (FSCS)?
- FSCS will safeguard policyholders if an authorised firm is unable to pay claims against it
Insurance Brokers
88
What is the maximum claim limit for claims made against insurance brokers set by the FSCS?
90%
89
Within how many weeks does the FCA expect the vast majority of complaints to be resolved?
Within 8 weeks
90
Other types of insurance have what percentage compensation limits?
90% with no upper limit
91
Is a decision made by the Financial Ombudsman Service (FOS) scheme binding on the firm and customer?
- Only the firm
- Customer can challenge in court if they disagree
