Unit 5 - Complaints and redress Flashcards
What are the 5 different types of eligible complainants?
Retail clients = CMC - ST
- Consumer (acting privately)
- Microenterprise - business with < 10 employees and turnover < 2m euros
- Charities w/ income < £6.5m
- SME with turnover < £6.5m and balance sheet threshold (= net assets) of £5m OR < 50 employees
- Trusts with net assets < £5m
How are firms complaints procedure found?
- must be in writing
When must complaints procedure be disclosed?
Exceptions?
- given to client at 1st contact
- on request
- when complaint received (UNLESS complaint fixed in 3 business days)
What is stated in complaints procedure?
- how they receive complaints
- hey they respond
- how they ix (indep + timing)
- that they’ll escalate to FOS (financial Ombudsman service) if dont follow their own procedure
What are the timings of dealing with complaints?
- within 3 days then dont need to do anything else
- If not, must send in writing acknowledging complaint + complaints procedure + aim to resolve within 8w
- If not, must explain that complainant has 6m to approach FOS
What is transparency as a regulatory tool regarding complaints?
Firms who get > 500 complaints within 6m must publish:
1. total complaints opened + closed
2. no. closed within 8w
3. % of complaints upheld
Who are the FOS?
They’re a board appointed by FCA but they make decisions independent of FCA
Purpose of the FOS?
- free dispute resolution for eligible complainants = aim to do so privately
How do the FOS compensate complainants?
What happens if complainant rejects?
Can give max of £355k (and reasonable costs) for financial loss/ pain and suffering/ rep damage etc
If rejected, issue goes to court (but not free/ private)
What firms are subject to FOS?
- Compulsory jurisdiction - authorised firms
- voluntary jurisdiction (firms may do this to give customers reassurance) e.g. buy to let mortgage providers
What is a super-complaint?
Who makes them?
Complaint made to FCA if lots of consumers are having same issues (Coming from OUTSIDE FINANCIAL SERVICES)
Made by HMT approved bodies
- citizen advice bureau
- consumer association = Which?
What is a mass-detriment reference?
Complaint made (WITHIN FINANCIAL SERVICES) to FCA by firm/ FOS if there’s been lots of failures of firm to comply with regulations / if firm acting in a way that FOS would find them guilty but the problem is with the regulation
How does the FCA respond to super complaints/ mass-detriment references?
Must respond within 90 days what they will do
What is the purpose of the financial services compensation scheme?
Who’s it funded by?
Time limit?
Allows clients to claim for losses when firm goes into liquidation
Funded by authorised firms (accountable to FCA/PRA)
Claims must be made within 6 years from when event –> complaint happened
What claims can eligible claimants make under FSCS?
For what amount?
Who are they?
- Deposits/ investments/ home finance
- Max £85k
- Includes RC + PC NOT eligible counterparty
What claims can all clients make under FSCS? For what? Who’s excluded?
- Compulsory/ LT insurance -> 100% back
- General insurance - 90% back
Excludes authorised firms
Punishment for:
1.Conducting regulated activity if not authorised?
2. Not giving regulators info they ask for?
3. Insider dealing/ misleading statements and impressions?
4. market abuse?
5. Not complying to regulations (irrespective of if ML actually occurs)
6. Making false/ misleading statements regarding ML
7 .hiding/ helping/ acquiring ML
8. knowingly prejudicing an ML ix
9. Employees who work in regulated sector not reporting ML
10. employees who work in regulated sector tipping off someone involved in ML
11. Failure to report suspicions of use of funds/ ML terrorist funds according to anti-terrorism crime security act
12. Punishment on individual paying/ receiving bribes?
13. Punishment on company paying/ receiving bribes?
- Conducting regulated activity if not authorised?
2yrs/ unlimited fine - Not giving regulators info they ask for?
2yrs/ unlimited fine - Insider dealing/ misleading statements and impressions?
7yrs/ unlimited fine - market abuse?
Civil offence > unlimited fine
5 + 6. Not complying to regulations (irrespective of if ML actually occurs) + Making false/ misleading statements regarding ML > 2yrs in prison +/ or unlimited fine
- hiding/ helping/ acquiring ML > 14 yrs +/ or unlimited fine
- knowingly prejudicing an ix > 5 yrs +/ or unlimited fine
- Regulated sector offences (reg. financial services) not reporting ML > 5 yrs +/ or unlimited fine
- Regulated sector offences tipping off 2 yrs +/ or unlimited fine
- Failure to report suspicions of use of funds/ ML terrorist funds according to anti-terrorism crime security act > 5 yrs/ unlimited fine
- Punishment on individual paying/ receiving bribes? 10 yrs/ unlimited fine
- Punishment on company paying/ receiving bribes? unlimited fine
Record keeping for:
1. Changing in SM responsibilities?
2. Customer ID under MLR?
3. Voice/ email recordings under COBS rules?
4. Client agreement records?
5. Non-MIFID business?
6. MIFID business
7. pension transfers/ opt out / extra contributions
- records must be kept for 6 years from any change in SM responsibilities
- MLR state must keep records for 5 yrs (from date account closed)
- Keep voice/email recordings for 5 years if: receiving/ executing/ arrange client order
- Records kept for the longer of 5 yrs/ duration of relationship with client
- 3 y - non MIFID business
- 5y - MIFID business/ pension contracts and life assurance
- Indefinitely - pension transfers/ opt out / extra contributions
