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P0 > Unit 9 - Consumer Protection > Flashcards

Unit 9 - Consumer Protection Flashcards

1
Q

Which act means financial business needs to be regulated?

A

Financial Services and Markets Act 2000

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2
Q

How do consumers benefit from FCA/PRA?

A
  • Checks made on standing of firms
  • Rules on how firms deal with customers
  • Formal complaints procedure
  • Compensation scheme
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3
Q

How does FCA meet objective of protecting consumers under FSMA2000?

A
  • Puts in place safeguards to protect against cowboys

- Provides consumers with information

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4
Q

FCA protection mechanisms

A

MATURE

  • /A/uthorising firms
  • Setting and /M/aintaining standards
  • Ensuring authorised firms /T/CF
  • Securing /r/edress
  • Acting against /U/nauthorised firms
  • /E/nforcing rules
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5
Q

FCA mechanism - authorising firms

A

Firms must be honest, competent and financially sound, e.g. fit and proper individuals

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6
Q

FCA mechanism - maintaining standards

A

E.g. capital provision and effective systems and controls and COBS (conduct of business standards)

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7
Q

FCA mechanism - TCF

A

What info given to clients at POS and after. Mis-selling and informed about product performance?

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8
Q

FCA mechanism - redress

A

Liaises with ombudsman to understand where redress needed. May need to do past business reviews.

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9
Q

FCA mechanism - unauthorised firms

A

Look up false claims, preliminary enquiries and following up on leads. Focus on perimeter firms

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10
Q

FCA mechanism - enforcing the rules

A

Civil and criminal court powers

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11
Q

FSCS

A

Protects consumers if firm collapses

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12
Q

FSCS - deposit max limit

A

£85,000

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13
Q

FSCS - investments

A

£50,000

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14
Q

FSCS - compulsory insurance (e.g. third party motor)

A

Full claim

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15
Q

FSCS - non-compulsory insurance

A

90% of claim

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16
Q

FSCS - mortgage advice

A

£50,000

17
Q

IFOA requirements

A

Prof indem ins required as a designated professional body. Need to have min of £5m or 250k per relevant person. Need to consider whether more appropriate

18
Q

What is the financial ombudsman?

A

Under FSMA2000 the FCA has the power to set up an independent dispute resolution procedure - Fin Omb

19
Q

FCA handbook - complaints

A

Shows time limits on complains, procedures to put in place, records of complaints that must be made etc
Stops complaints being passed to ombudsman

20
Q

IDRP - stages

A

1) receiving complaints
2) responding to complaints
3) appropriate investigation of complaints
4) notifying right of complainant to go to FO

Should allow complaints by phone/email/letter etc and must have senior person overseeing

21
Q

IDRP - publishing

A

Must:

  • refer complaints to IDRP
  • publish details of IDRP
  • provide info on IDRP free if asked
22
Q

IDRP - assessing complaints

A

Must be done fairly, competently and diligently

Should assess:

  • matter of complaint
  • whether to uphold
  • what remedial action/redress needed
  • who is responsible? sole or joint?
23
Q

IDRP - acknowledgement

A

Must send written acknowledgement with job title of investigator and keep updating

24
Q

IDRP - time limit

A

8 weeks:

  • send a final response or
  • holding letter saying why not ready, letting them know they can go to FO
25
Q

IDRP - final response

A
  • Can refer to FO if not ok

- Send a copy of FO leaflet

26
Q

IDRP - how long to hold onto complaints?

A

3 years

27
Q

IDRP - what to tell FCA?

A

Twice a year:

  • no of complains received
  • no of complaints closed
    • in 4 wks, in 4-8 wks, plus 8 wks
  • no of complaints upheld and number still outstanding
  • redress paid in period
28
Q

Other consumer protection bodies

A 
Which?
Consumer Futures
FCA Consumer Panel
Age UK
Citizens advice
ABI
Investment association
Association of investment companies

P0 (9 decks)

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