Unit 9 - Complaints & Compensation (3 of 80)

Question 1

What is the role of the FOS?

Answer 1

1) to resolve complaints quickly and with “minimum formality”

2) free to complainants

Question 2

How does the FCA define a complaint?

Answer 2

Any ORAL or WRITTEN expression of dissatisfaction about the provision of, or failure to provide, a financial service which alleges that the complainant has suffered financial loss, material distress/ inconvenience

Question 3

How long does a complainant have to contact FOS?

Answer 3

• six years from the event being complained about
• three years from becoming aware that they could make a complaint

Question 4

What is the FOS complaint limit?

Answer 4

£430,000 for complaints referred to FOS on or after 1 April 2024 about acts or omissions by firms on or after 1 April 2019

£415,000 for complaints about acts or omissions by firms on or after 1 April 2019, and which are referred to the service on or after 1 April 2023.

Question 5

What are Compulsory and Voluntary Jurisdictions?

Answer 5

• Compulsory jurisdiction – complaints from eligible complainants against FCA authorised firms in relation to regulated activities
• Voluntary jurisdiction (VJ) – other complaints, including:

       1) mortgate lending by non-FCA-authorised firms
       2) other specified lending activity
       3) providing payments on PLASTIC CARDS  (excluding                    store cards)
       4) accepting deposits and providing general insurance if the service provided from elsewhere within the EEA but directed at the UK.

Question 6

What is the purpose of ‘Super Complaints’ and how long does the FCA have to respond?

Answer 6

> Certain consumer organisations will be able to make what are known as super-complaints. The aim is to provide consumer bodies with a way of raising competition and consumer issues with the FCA

> The FCA must respond within 90 days of the ‘super-complaint’ being raised with them

Question 7

What is the role of TPO?

Answer 7

• TPO handles complaints and disputes relating to personal/occupational pensions schemes
• Independent company, with an operational executive and a corporate board

Question 8

Who are eligible complainants?

Answer 8

• A consumer (retail/professional clients)
• Enterprise with < 10 employees and turnover/annual balance sheet < £2 million
• Charities - annual income < £6.5 million
• Trustees - NAV < £5 million
• Small businesses - annual turnover < £6.5 million and < 50 employees or balance sheet < £5 million.
• A person acting outside their business/profession or a ‘buy to let’ borrower

Question 9

Are Eligible Counterparties also Eligible Complainants?

Answer 9

No

Question 10

How should a firm invetigate a complaint?

Answer 10

• competently
• diligently
• impartially

Question 11

How long does a firm have to deal with a complaint?

Answer 11

By the end of EIGHT WEEKS after their receipt of the complaint, firms must:

1) send a final response accepting the complaint, offering redress/remedial action,
2) offer redress or remedial action without accepting the complaint
3) rejects the complaint and gives reasons for doing so

Question 12

What should a firm do when rejecting a complaint?

Answer 12

they must enclose a copy of the FOS leaflet and inform the complainant they may refer the complaint to the FOS within “six months”

Question 13

How often do firms have to provide the FCA a report detaling complaints from eligible complainants?

Answer 13

Twice a year

Question 14

What should a firm do if it receives 500 or more complaints during a 6 months period?

Answer 14

Provide the FCA the following with regards to the relevant reporting period and particular categories of products:

• Information about the total number of complaints and causes
• Information about the number of complaints that were:

1) closed or upheld within different periods of time

2) the amount of redress paid by the firm for unheld/not upheld complainrs

3) Information providing context

Question 15

When is a complaint considers closed if a complainant has not responded to the written response?

Answer 15

After 8 weeks

Question 16

How long should firms keep records of complaints and resolutions?

Answer 16

1. MiFID business or UCITS portfolio management services = at least 5 years
2. all other complaints = at least 3 years

Question 17

What is the role of the FSCS?

Answer 17

The FSCS = insurance policy that is paid for by all authorised firms providing protection to some clients in the event of a firm’s collapse

Question 18

Who are eligible FSCS claimants?

Answer 18

• natural persons (individuals)
• corporates (unless they fall under one of the exclusions)
• partnerships
• mutual associations/unicorporated associations
• pension schemes and retirement funds, but only the following:

                - personal pension schemes
  
                -  stakeholder pension schemes
  
                 - occupational pension schemes of micro, small or medium 
                 enterprises.

Question 19

What are protected claims?

Answer 19

• For a protected deposit/dormant account.
• Made under a protected contract of insurance.
• Made in connection with protected investment business.
• Made in connection with protected home finance mediation.
• Made in connection with protected non-investment insurance mediation.

Question 20

What are the FSCS payouts?

Answer 20

• For protected insurance (long-term insurance contract) = 100% of the claim (no max).
• For protected compulsory insurance (general insurance contract) = 100% of the claim (no max).
• For protected non-compulsory insurance – 90% of the claim (no max).
• For protected investment business and home finance advice – 100% up to £85,000.
• For protected deposits – 100% up to £85,000 “per individual” per financial institution.