U2: T25 - CONSUMER RIGHTS, COMPLAINTS AND COMPENSATION Flashcards
In situations where alternative dispute resolution is being used, which of the following options allows for appeal through the courts?
a) Arbitration.
b) Mediation.
c) Adjudication.
d) Conciliation.
c) Adjudication.
Note that option d) conciliation is not one of the options available under alternative dispute resolution.
In summary, in what circumstances is a contract or notice deemed to be unfair?
A contract or notice is deemed to be unfair if it causes a significant imbalance in the rights and obligations of the various parties to the contract to the detriment of the consumer.
Which of the following would not be classed as an eligible complainant according to the FCA’s definition?
a) A private individual.
b) A business with an annual turnover below £6.5m and fewer than 50 employees, or an annual balance sheet below £5m.
c) A charity with an annual income of less than £6.5m when the complaint is made.
d) Trustee of a trust that has a net asset value of less than £6.5m when the complaint is made.
d) The net asset value must be less than £5m, not £6.5m.
Which of the following is a step that must be carried out when a firm receives a complaint, if it cannot be resolved within three working days?
a) Call the complainant to discuss the matter.
b) Advise the customer that they can refer the matter to the FSCS.
c) Refer the complaint to an individual in an FCA governing function.
d) Ensure the complaint is investigated by a person of sufficient competence, who, where possible, is not someone directly involved in the matter under complaint.
d) A firm must ensure the complaint is investigated by a person of sufficient competence, who, where possible, is not someone directly involved in the matter under complaint.
Within what period of time does the FCA expect firms to resolve the majority of complaints?
Eight weeks.
Once a firm has completed its procedures for resolving a complaint, it must always issue the complainant with a final response letter.
True or false?
False.
For complaints that are resolved by close of business on the third working day following receipt, the firm must provide a summary resolution communication to the complainant, advising them of their right to refer the matter to the FOS should they remain dissatisfied with the firm’s response.
For how long must records of complaints involving MiFID business be retained by the firm?
a) One year.
b) Three years.
c) Five years.
d) Indefinitely.
c) Five years.
Within what time limits must a complaint be made to the Financial Ombudsman Service?
Complaints to the FOS must be made within six months of receiving a final response, six years of the event that gives rise to the complaint, or within three years of the time when the complainant should have become aware that they had cause for complaint, whichever is the later.
Which organisation is responsible for dealing with complaints relating to the sale of pension products?
a) The Financial Ombudsman Service.
b) The Pensions Ombudsman Service.
c) The Pensions Advisory Service.
d) The Financial Services Compensation Scheme.
A) The Financial Ombudsman Services.
The Pensions Ombudsman Service and The Pensions Advisory Service only deal with complaints relating to the running (ie administration) of personal and occupational pension schemes. The Financial Services Compensation Scheme deals with compensation for customers who have lost money through the insolvency of an authorised firm.
What is the maximum permissible compensation payable by the FSCS for a term assurance policy that provides £100,000 cover over a 20‐year term?
One hundred per cent of the value of the policy with no upper limit.
Sarah made a complaint to her bank and is not satisfied with the response. If she wants to refer the complaint to the Financial Ombudsman Service, she must do so within what period of the response?
Question 1 options:
a) 30 days.
b) 4 weeks.
c) 3 months.
d) 6 months.
d) 6 months.
In relation to the Financial Services Compensation Scheme (FSCS), which of the following is true?
Question 2 options:
a) Compensation cannot be awarded for stock market losses.
b) Small businesses are not eligible to make claims to the FSCS.
c) Oversight of the FSCS is solely the responsibility of the FCA.
d) Home finance claims are limited to £85,000 per mortgage.
a) Compensation cannot be awarded for stock market losses.
Which of the following would result in full settlement of a claim to the Financial Services Compensation Scheme?
Question 3 options:
a) Saleem, whose car insurer became insolvent before his accident claim was settled.
b) Will, whose home contents claim has been refused by his insurer.
c) Dolores, who lost £90,000 as a result of her investment adviser’s insolvency.
d) Greg, who is not happy with his bank’s final resolution letter in response to his claim for £4,000 compensation for a product mis-sale.
a) Saleem, whose car insurer became insolvent before his accident claim was settled.
Under the Consumer Rights Act Alternative Dispute Resolution options, adjudication decisions can be appealed through courts
Question 4 options:
a) True
b) False
a) True
Within what timescale must the FCA respond to a super-complaint?
Question 5 options:
a) 30 days.
b) 60 days.
c) 90 days.
d) 120 days.
c) 90 days.
Sahan has been awarded £160,000 compensation by the Financial Ombudsman Service. Sahan and the firm are not satisfied with the result. Which of the following is true?
Question 6 options:
a) The award is not binding on either party and either party can appeal through court.
b) The award is binding on both parties.
c) The award is binding on Sahan, but the firm can appeal through court.
d) The award is binding on the firm, but Sahan can appeal through court.
d) The award is binding on the firm, but Sahan can appeal through court.
The Consumer Rights Act 2015 does not cover which of the following?
Question 7 options:
a) Consumer rights when services are not provided.
b) Unfair contract terms.
c) Consumer rights when goods are faulty.
d) Compensation limits for successful claims.
d) Compensation limits for successful claims.
Jenny has complained about the sale of a life policy. For what minimum period must the firm keep a record of the complaint?
Question 8 options:
a) 1 year.
b) 3 years.
c) 5 years.
d) 10 years.
b) 3 years.
Adam and Angie had £210,000 in a joint deposit account when the bank became insolvent. What compensation, if any, would they receive through the Financial Services Compensation Scheme?
Question 9 options:
a) Nothing initially, they must first go through the Financial Ombudsman Service.
b) £85,000.
c) £170,000.
d) £210,000.
c) £170,000.
Which of the following would not be eligible to refer a complaint to the Financial Ombudsman Service?
Question 10 options:
a) A charity with annual income of £5.5m.
b) Jordan, who has a complaint about a consumer buy-to-let mortgage.
c) James, on behalf of his business, which has 45 employees and annual turnover of £5.5m.
d) A trustee of a trust with net assets of £5.5m.
d) A trustee of a trust with net assets of £5.5m.
Which of the following elicits 2 years MAXIMUM jail sentence?
1) Money Laundering
2) Tipping Off
3) Reckless misstatements
3) Reckless misstatements
Which of the following elicits 5 years MAXIMUM jail sentence?
1) Money Laundering
2) Tipping Off
3) Reckless misstatements
2) Tipping Off
The FATF is a policy making body. True or false?
False
It is a policy-making body: it does not become involved in law
enforcement (that is the responsibility of local authorities in
individual countries, such as the National Crime Agency in
the UK). In addition to member nation states, the European
Commission and the Gulf Co-operation Council also belong to
the FATF.
Which of the following does not require Money Laundering Identification procedures to be carried out?
A) New business Relationship
B) Occasional transaction exceeding 15,000 EUR
C) Life Assurance Policies
D) Direct Investments
E) Suspicion
F) Doubts
G) Change of Circumstances
D) Direct Investments - not one
How long must evidence of identification be retained?
1) 5 years after the relationship with the customer started
2) 3 years after the relationship with the customer started
3) 5 years after the relationship with the customer ended
4) 3 years after the relationship with the customer ended
3) 5 years after the relationship with the customer ended
The FCA can discipline firms and individuals for breaches of money-laundering rules,
True or false.
True
Which of the following elicits 14 years MAXIMUM jail sentence?
1) Money Laundering
2) Tipping Off
3) Reckless misstatements
1) Money Laundering
The maximum penalty in the UK for an individual convicted of a bribery
offence is an unlimited fine and imprisonment for up to:
A) 5 years
B) 10 years
C) 15 years
B) 10 years
