Section 9 Flashcards Preview

R01 > Section 9 > Flashcards

Flashcards in Section 9 Deck (7)
Loading flashcards...
1

Complaints Procedures

•Every authorised firm must have (and publicise) a written complaints handling procedure
•Firms are required to nominate a senior individual to have responsibility for the complaint function within the firm

2

Eligible Complainant

•Consumer
•Micro-enterprise - fewer than 10 employees and turnover/balance sheet no more than 2m euros
•Charity with annual income below £6.5m
•Trustee of trust with net asset value below £5m
•Small business – annual turnover less than £6.5m and fewer than 50 employees or balance sheet total less than £5m
•Consumer buy-to-let consumer
•Guarantor

3

Complaint process

•Complaint is any expression of dissatisfaction (oral or in writing) alleging financial loss, material distress or material inconvenience
•Once complaint received firm must investigate competently, diligently and impartially
•Assess fairly, consistently and promptly to decide whether to uphold and any remedial action/redress
•Send prompt written acknowledgement
•Keep complainant informed of progress
•Final response required after 8 weeks
•If no final response after 8 weeks, then right to refer to FOS
•Rapid resolution complaints - 3 days

4

Financial Ombudsman Service (FOS)

•Set up under FSMA as ombudsman for all complaints against authorised persons carrying out regulated activities

•Aim
o To resolve disputes quickly and with minimum of formality

•Only eligible claimants can refer to FOS

•Must refer within earlier of:
o 6 months after firm’s final response
o 6 years after event occurred
o 3 years after claimant knew/should have known had cause for complaint

•Firms must co-operate with FOS and produce relevant documentation
•FOS investigates complaints, gives parties opportunity to make representations then holds hearing
•Decision notified in writing to all parties
•Complainant can accept or decline decision within specified time limit

•If decision accepted, then binding on respondent
•If decision rejected, then not binding and can pursue in court

•FOS can award compensation up to £355,000 plus costs and interest
o Lower figure prior to 1 April 2020
o £350,000 for complaints 1 April 2019 – 31 March 2020

•FOS funded by general levy on participating firms, plus a case fee paid by the firm the complaint relates to

5

Financial Services Compensation Scheme (FSCS)

•Established under FSMA to compensate claimants where authorised persons (or their ARs) are unable to satisfy claims

•Non-eligible claimants:
o Overseas firms
o Pension and retirement funds
o Supranational institutions, governments
o Provincial, regional, local and municipal authorities
o Large companies
o Large partnerships or large mutual organisations
o Alternative investment funds

•Claim must be for:
o Protected deposit (UK deposit account)
o Protected insurance contract
o Protected investment business
o FSCS decides if firm is in default i.e. unable or unlikely to be able to satisfy claim

6

FSCS Compensation Limits

•Per person/authorised firm:
o Deposits - £85,000
o Investments - £85,000
o Home finance mediation (mortgages) - £85,000
o Pension provider – 100%, no limit
o SIPP provider - £85,000
o Long term insurance – product providers 100% claim no upper limit, intermediaries 90% (sometimes 100%) claim no upper limit
o General insurance – compulsory 100% valid claim / unexpired premiums no limit, non-compulsory 90% claim no upper limit

•FSCS funding is via a levy on authorised firms

7

Protection for Pensions

•The Pensions Advisory Service (TPAS)
o Aims to make pensions accessible and understandable
o Free information and guidance on all types of pension
o Independent body, grand-funded by DWP

•Pension Protection Fund (PPF)
o Compensates members of eligible DB schemes where employer insolvent and unable to pay pension benefits at PPF levels
o Funded by DB schemes it protects



•The Pensions Ombudsman (TPO)
o If complainant unhappy with response from provider firm to a complaint or a decision of PPF or its predecessor the Financial Assistance Scheme, can request TPO review the situation
o TPO decision binding and enforceable in court

•Money and Pensions Service (MaPS)
o Single financial guidance body, brings together MAS, TPAS and Pension Wise
o 5 functions – pension guidance, debt advice, money guidance, consumer protection, strategy