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Financial Planning > Topic 4 - Complaints And Compensation > Flashcards

Topic 4 - Complaints And Compensation Flashcards

1
Q

Where are the FCA’s rules regarding complaints and compensation found?

2 items

A

In the handbook: Dispute Resolution: Complaints (aka DISP)

Compensation handbook aka COMP

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2
Q

What do DISP rules cover?

A

How complaints are to be dealt with by firms, payments providers and FOS.

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3
Q

When did the DISP rules last get refreshed?

A

30 June 2016

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4
Q

Before FOS can look at a complaint what must happen?

A

Matter should be brought to the firm’s attention and they should have had the opportunity to resolve it.

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5
Q

Key requirements of a firm’s complaints procedures are …

6 items

A

Have appropriate and effective complaint handling procedures

Ensure customers are aware of these procedures

Aim to resolve complaints promptly

Notify complainants of FOS referral rights.

Report to FCA complaints figures 6 monthly

Investigate the root cause and take action to prevent recurrence

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6
Q

How does the FCA define a complaint.

A

Any expression of dissatisfaction,

whether oral or written

Justified or not

From or on behalf of an eligible complainant

About a firm’s provision of (or failure to provide) a financial service.

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7
Q

Who are eligible complainants?

5 items

A

Private individuals

Micro enterprises (under €20m turnover and less than 10 staff)

Charities with income less than £1m pa

Trustees of a trust with assets under £1m

Buy to Let Consumers

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8
Q

How should complaints be resolved?

A

All complaints must be investigated promptly and thoroughly by a person of sufficient competence who (where possible) was not involved in the matter under complaint.

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9
Q

What is the aim of the complaint process.

A

Ensure any specific problem identified by the complainant is remedied.

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10
Q

When are firms able to adopt a less formal approach to resolving a complaint?

A

When it can be resolved on the 3rd working day following receipt.

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11
Q

What must a firm provide where a complaint is resolved before the end of day 3

A

SRC instead of FRL.

The format of an SRC is set out in DISP.

It gives the client the right to raise to FOS.

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12
Q

Where a complaint can’t be resolved within 3 business days when must complaints be resolved.

A

Promptly

Within 8 weeks.

If it can’t be they must issue an update and guidance on when they think the matter will be resolved.

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13
Q

At the outset of a complaint what must be issued

A

Written confirmation that the complaint has been received and they are dealing with it.

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14
Q

When can a client go to FOS

A

Once a decision has been reached

Or

After 8 weeks

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15
Q

What should a firm do about the root cause of complaints?

A

Identify them

Correct recurring problems where practical.

A firm should have management controls to identify and remedy recurring and systemic problems.

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16
Q

In recognition of the importance of complaints financial services providers are required to identify what?

A

A senior manager responsible for complaint handling in the firm.

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17
Q

When were New regulations on Payment services complaints were introduced?

A

January 2018

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18
Q

What is the timescale for payments complaints?

A

15 Business days

In exceptional circumstances for reasons beyond the firm’s control they may issue a letter explaining about the delay.

The deadline for the final written response cannot be more than 35 business days.

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19
Q

How long should complaint records be kept?

A

At least three years where it relates to MiFiD business this must be at least 5 years.

20
Q

The 6 monthly reports to the regulator must show what?

6 items.

A

Total number of complaints received.

The number of complaints closed by the firm -

  • within 4 weeks of receipt
  • up to 8 weeks of receipt
  • more than 8 weeks after receipt

Number of upholds

Number of open complaints

Total redress paid

Root cause and action taken.

21
Q

What firms are permitted simplified reporting.

A

Those with fewer than 500 in a 6 month period.

22
Q

Under what circumstances are firms required to publish complaints data and root cause info.

A

If they received more than 500 in a 6 month period.

23
Q

What is FOS’s aim?

A

It’s an independent body that aims to resolve disputes quickly with the minimum of formality.

24
Q

How does FOS decide cases?

A

It bases its decisions on what is fair and reasonable based on the circumstances of each case.

25
Q

How is FOS funded?

A

Membership is compulsory for all firms authorised under the FSMA 2000

Funded by members - general levy and a case fee of £550 for all cases after the 26th

26
Q

For FOS to look into a complaint what rules apply.

3 items

A

No more than 6 months after the FRL

Or

Within 6 years of the even

Or

Within 3 years of when the complainant should have been aware that they had cause for complaint.

27
Q

What is the maximum award that FOS can make?

A

£150,000 plus interest and complainants costs.

This is not meant to be punitive but to put the client back in the position they would have been in.

28
Q

On whom is the FOS decision binding.

A

Firms.

Claimant can reject and take matter to court.

29
Q

What’s a super-complaint?

A

Designated consumer bodies have the right to make a super-complaint to the FCA where they consider that activities are damaging to the financial services market in the UK or the interests of consumers.

30
Q

The FCA must reply in 90days of receipt of a super-complaint. Saying what …

A

Announce plans to consult on an issue

Timetable for regulatory action

Explain how the issue is already being addressed

Or explain why no action will be taken.

31
Q

What does the Pensions Ombudsman cover?

A

Complaints and disputes relating to the running of occupational pension schemes.

32
Q

Who deals with pension misspelling complaints?

A

FOS

33
Q

What sort of complaints does the Pensions Ombudsman deal with?

A

Cases of maladministration that have lead to an injustice (detriment).

34
Q

What are Pensions Ombudsman disputes?

A

Disagreements about fact or law.

35
Q

Who might make a complaint to Pensions Ombudsman?

4 items

A

Members and ex-members of schemes

Their Spouses

Their widows or surviving dependants

Representatives of the above.

36
Q

What is the process leading up to referral to the Pensions Ombudsman?

3 items

A

First must be addressed by the schemes managers or trustees

Next referred to The Pensions Advisory Service (TPAS) for Mediation and conciliation.

Then onto Pensions Ombudsman whose decision is binding on all parties.

37
Q

What’s the FSCS

A

Financial Services Compensation Scheme

38
Q

Which Sourcebook governs the FCSC

A

COMP handbook

39
Q

How is the FSCS funded?

A

Annual levy on every authorised firm.

40
Q

What is covered by FSCS?

5 items

A

Loss of deposited funds

Investments

Home finance

Insurance business

Insurance Mediation

41
Q

When is payment for lost funds under FSCS triggered?

A

When a firm authorised by PRA such as a bank or Building Society goes bust.

Or PRA considers that a firm is unable to repay its depositors.

42
Q

What is the payout by FSCS for deposited funds and timescales.

A

100 per cent of first £85k

Additional cover of up to £1 million in respect of temporarily high balances held for less than six months.

Payout in 7 days with more complex cases up to 20 days.

43
Q

What is the payout by FSCS in respect of investments.

A

100% up to £50k

44
Q

FSCS home finance subs scheme provides protection in what circumstances.

A

A mortgage firm is unable to pay claims against it.

Max claim 100% upto £50k

45
Q

The insurance compensation scheme covers claims in what circumstances

A

Failure of an authorised insurer (life or general).

46
Q

What is the level of compensation paid by insurance scheme

A

Long term insurance 100% of value of policy.

100% of protection element of protection/savings policies

100% for compulsory insurance - motor, employers

Annuities have 100% cover

47
Q

Can FSCS claims be made for stock market falls or poor advice.

A

No

Financial Planning (5 decks)

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