Unit 9 - Consumer Protection Flashcards
Which act means financial business needs to be regulated?
Financial Services and Markets Act 2000
How do consumers benefit from FCA/PRA?
- Checks made on standing of firms
- Rules on how firms deal with customers
- Formal complaints procedure
- Compensation scheme
How does FCA meet objective of protecting consumers under FSMA2000?
- Puts in place safeguards to protect against cowboys
- Provides consumers with information
FCA protection mechanisms
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
FCA mechanism - authorising firms
Firms must be honest, competent and financially sound, e.g. fit and proper individuals
FCA mechanism - maintaining standards
E.g. capital provision and effective systems and controls and COBS (conduct of business standards)
FCA mechanism - TCF
What info given to clients at POS and after. Mis-selling and informed about product performance?
FCA mechanism - redress
Liaises with ombudsman to understand where redress needed. May need to do past business reviews.
FCA mechanism - unauthorised firms
Look up false claims, preliminary enquiries and following up on leads. Focus on perimeter firms
FCA mechanism - enforcing the rules
Civil and criminal court powers
FSCS
Protects consumers if firm collapses
FSCS - deposit max limit
£85,000
FSCS - investments
£50,000
FSCS - compulsory insurance (e.g. third party motor)
Full claim
FSCS - non-compulsory insurance
90% of claim
FSCS - mortgage advice
£50,000
IFOA requirements
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
What is the financial ombudsman?
Under FSMA2000 the FCA has the power to set up an independent dispute resolution procedure - Fin Omb
FCA handbook - complaints
Shows time limits on complains, procedures to put in place, records of complaints that must be made etc
Stops complaints being passed to ombudsman
IDRP - stages
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
IDRP - publishing
Must:
- refer complaints to IDRP
- publish details of IDRP
- provide info on IDRP free if asked
IDRP - assessing complaints
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?
IDRP - acknowledgement
Must send written acknowledgement with job title of investigator and keep updating
IDRP - time limit
8 weeks:
- send a final response or
- holding letter saying why not ready, letting them know they can go to FO
IDRP - final response
- Can refer to FO if not ok
- Send a copy of FO leaflet
IDRP - how long to hold onto complaints?
3 years
IDRP - what to tell FCA?
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
Other consumer protection bodies
Which? Consumer Futures FCA Consumer Panel Age UK Citizens advice ABI Investment association Association of investment companies
