Consumer Redress Schemes sourcebook

Unless the context otherwise requires, references to a consumer redress scheme in■CONRED 1.2 to 1.7 are references to an arrangement established under section 404 of the Act (ie an arrangement falling under paragraph (a) of the definition of the glossary) and references to a . However, ■CONRED 1.4.6G to 1.4.14G explains which consumers may be covered by a consumer indemnification scheme established under Section 404 of the Act.

Failures that can be dealt with under a consumer redress scheme

If stakeholders disagree with the FCA's interpretation of the law, as expressed in the draft scheme rules, they will be able to say so during the consultation process. The fact that a consumer redress scheme cannot be used to seek redress in relation to breaches of the Principles would not prevent the Principles from being taken into account for the purposes of interpreting one of the FCA's more detailed rules.

Desirability’ of making a consumer redress scheme

Scope of a consumer redress scheme

The services that a consumer redress scheme can apply to

That said, it would be possible for the Treasury by order to expand the type of services that a consumer redress scheme could cover to include pre-regulatory activities (see section 404G of the Act).

Consumers that can be covered by a consumer redress scheme

The Section 404 power could be used in relation to non-UK consumers if they are protected by the underlying law. The fact that a consumer "who may have considered using" a relevant service may be covered by a consumer complaints scheme is unlikely to capture many cases in practice.

Applicability of a scheme to other situations

Operation of a consumer redress scheme

Investigation of cases under a consumer redress scheme

Firms that are no longer authorised by the FCA or have transferred their business to another firm

Other matters that may be included in the rules of a consumer redress scheme

Firms may also be required to draw the attention of the Financial Ombudsman Service scheme in any individual case referred to it. As such, the FCA will consult the Financial Ombudsman Service about the content of such communications.

Issues that come to light during the period in which the scheme is running

It will also benefit businesses if complaints are subsequently forwarded to the Financial Ombudsman Service. 404A(1)(b) of the Act), the FCA could amend the rules accordingly.

Types of redress a firm can be required to make under a consumer redress scheme

The § 404 authority does not, by itself, remove a consumer's right to bring a case before the courts. However, any appeals received during legal proceedings will be set off against compensation payable under a consumer complaints scheme and vice versa.

Waivers or modifications of the scheme rules

The FCA will endeavor to provide as much guidance as possible in the Scheme Rules on how fees should be calculated (eg by establishing a formula or other methodology) to assist both the firms and the Ombudsman. The settlement rules would also relate to the situation in which a consumer had previously received redress from the financial ombudsman service.

Dealing with complaints when a consumer redress scheme is in place

Non-compliance with the consumer redress scheme rules

Publication of the existence of a scheme

Role of the Financial Ombudsman Service and the Financial Services

How the Financial Ombudsman Service will deal with

Complaints received by the Financial Ombudsman Service before a scheme comes into effect

Complaints received by the Financial Ombudsman Service while a consumer redress scheme is in effect

Complaints received by the Financial Ombudsman Service after a consumer redress scheme has ended

Non-consideration and dismissal of complaints by the Ombudsman

Case fees

Time limits

Consumers will have six months from the date the company sent them the compensation decision to appeal to the Financial Ombudsman Service. A company cannot agree to the Ombudsman handling a complaint outside these standard time limits if the complaint is a.

Awards

If the company did not provide a compensation decision (eg because it did not deal with a particular consumer's case under the scheme), consumers will have more than six years from the event complained of and three years from the date the consumer found out (or would have should reasonably have been aware) that they have grounds for complaint, to complain to the Financial Ombudsman Service (in accordance with the existing standard time limits in ■DISP 2.8). However, the Ombudsman may deal with complaints outside of these standard deadlines if, in the Ombudsman's opinion, the consumer's non-compliance with the deadlines is the result of exceptional circumstances.

Firm-by-firm past business reviews that have already been agreed by a firm before a consumer redress scheme is made

Waivers of the scheme rules for particular firms

Failures by firms that span the period before and after an activity became regulated by the FCA

The FSCS

Challenging a consumer redress scheme

Any person (e.g. companies, consumers or their representatives) can apply to the Upper Tribunal to review the rules made (see Section 404D of the Act). The judge presiding over consumer redress proceedings in the Upper Tribunal shall be a judge of the High Court, Court of Appeal or Court of Session (or such other person as may be agreed upon by the Lord Chief Justice, the Lord President or the Lord Chief Justice of Northern Ireland and the Senior President of Tribunals) (see Section 404D(12) of the Act).

Dealing with consumer redress scheme cases

However, in relation to two particular aspects of a consumer redress scheme, the High Court will be able to conduct a full merits review to consider whether the FCA's interpretation of the law was correct (see section 404D( 6) and (7) of the act). As such, the High Court's role will be to check whether the FCA has reached the correct view.

Procedure in the Upper Tribunal

With regard to these two aspects, the FCA is limited to what a court or tribunal would do.

Possible outcomes of an application to the Upper Tribunal

Imposing a consumer redress scheme on a firm under section

Triggers that must be met before the FCA can introduce a consumer remedies scheme under section 404F(7).

Triggers that must be met before the FCA can impose a consumer redress scheme under section 404F(7)

Further information about changing a company's authorization or changing or imposing requirements on the FCA's own initiative under section 55J or section 55L of the Act is set out in EG 8. The FCA may refuse an application if the FCA considers it desirable to do so in order to expedite any of its operational objectives, for example a consumer protection objective (see section 55H(4) of the Act).

Consultation

For all other firms, an authorized person with a permit can voluntarily apply to the FCA to change this. As with voluntary applications to vary a consent, the FCA may refuse an application to voluntarily introduce, vary or cancel a requirement if it appears to the FCA that it is desirable to do so in order to fulfill any of its promote operational objectives (see section 55L (5) of the Act).

Circumstances in which the FCA will engage section 404B

It is important to note that enabling Section 404B will not automatically or always advance one or more of the FCA's operational objectives, such as the objective of consumer protection, even if the other terms of the proposed arrangement do. If section 404B is triggered, the ombudsman is normally required to decide on a complaint to be referred to the financial ombudsman service after the regulation has come into effect based on what, in the opinion of the.

Consultation with the Financial Ombudsman Service when the FCA is considering engaging section 404B

Internal process to be followed if the FCA proposes to engage section 404B

Challenging a consumer redress scheme imposed under section 404F(7)

Arch cru Consumer Redress

Application and subject matter of the scheme

Application to firms which made personal recommendations

Application to persons who have assumed a firm's liabilities

Wider application of certain provisions

Duration of the scheme

Subject matter of the scheme

If the company has not received a response from the consumer by 22 July 2013 to the letter required by■CONRED 2.4.4 Ror (if applicable) to the letter required by■CONRED 2.4.5R (1)or■( 2) , the company should deal with any complaint received from a consumer after that date in relation to the sale of Arch cru funds in accordance with the complaint handling rules of the DISP, unless■CONRED 2.5.1R (2)(in relation to exceptional circumstances) applies .

Defined terms

Redress Scheme

Summary of the scheme

Notifications and reports to the FCA

Consumer redress scheme

Deadlines to complete the steps in this section

First step: identify cases within subject matter of scheme

Office of the Ombudsperson for handling a complaint against the company arising from the recommendation in (1). The company's acceptance of any date prior to the suspension date (13 March 2009) as the date on which the consumer knew, or with reasonable care could have known, that he had suffered a loss may be relied upon as evidence of infringement. of■CONRED 2.4.2 R.

Second step: send initial letters to consumers

Third step: send follow-up letters to consumers

Applicable law

Reporting requirement: opted-in scheme cases

Consumer redress scheme: case review

Deadline to complete the steps in this section

First step: case review of each opted-in scheme case

Second step: cases of insufficient information

Third step: redress determination

Taking steps by or on behalf of FCA

Consumer redress scheme: paying redress

A company must pay the compensation determined to be paid to a consumer, calculated in accordance with the requirement of section 10 of the instructions in■CONRED 2 Appendix 13:. This rule is imposed by the FCA using the powers conferred on it under section 404A(1)(m) of the Act to make rules allowing for the enforcement of any remedy under a consumer complaints scheme.].

Supervision and delegation of scheme process by firms

Provisions relating to

Requests for information by the FCA

Reporting requirement: by 9 December 2013

Record-keeping requirements

Arch cru Consumer Annex 1 Redress Scheme

2Redress determination for customers outside subject matter of Arch

Annex 1/2

2Letter to consumers confirming existence of review and inviting request

Annex 2/2

2First reminder letter to consumers inviting request for review

Annex 3/2

2Second reminder letter to consumers inviting request for review

Annex 4/2

2Final letter to consumers who have not sent a request for review

Annex 5/2

2Redress determination where firm considers opt-in ineffective

Annex 6/2

2Letter to consumers confirming their case will be reviewed

Annex 7/2

2Initial letter requesting information/enclosing questionnaire

Annex 8/2

2Reminder letter

Annex 9/2

2Redress determination where consumer has not provided requested

Annex 10/2

2Redress determination letter for scheme cases

Annex 11/2

2Arch cru product advice suitability assessment template

Annex 12/2

2CF Arch cru funds template instructions

Annex 13/2
Annex 13/4
Annex 13/6
Annex 13/8
Annex 13/10
Annex 13/12
Annex 13/14
Arch cru Consumer Annex 14 Redress Scheme

This section does not record information about the consumer's capacity for loss (which is different from a consumer's ATR). 34;Comment on the consumer's capacity for loss" box in the "Consumer's financial situation" section of the template.

2Investment benchmarks

Annex 14/2

2Risks and features of Arch cru funds

Annex 15/2
Annex 15/4
Annex 15/6
British Steel Pension Scheme

16 It is the FCA's view that an investment in the Global Growth Fund is likely to be high risk and investors should understand and be prepared to accept the following investment risks:. a) risk for invested capital and return, in general - the risk that the investment may fall in value;. 27 It is the FCA's view that an investment in the Specialist Portfolio is likely to be high risk and investors should understand and be prepared to accept the following investment risks:. a) risk for invested capital and return, in general - the risk that the investment may fall in value;.

Pension Scheme Financial Resilience Requirements

Interpretation and application

Interpretation

7) "Suitability requirements" are the requirements in ■COBS 9.2.1R(1) and the common law obligation in contract or tort to exercise reasonable skill and care in advising the consumer on pension transfers; and. The effect of ■CONRED 3.1.1R(6A) is that a firm that has settled a potential case before the consumer redress scheme can cease to count the case towards the Financial Strength Assessment in ■CONRED 3.2 only if the settlement amount is calculated in compliance with the rules and guidelines in force.

Purpose

8) 'unsuitable BSPS advice' means BSPS advice that does not comply with the suitability requirements in force during the relevant period. The FCA reminds all businesses that they are required to calculate any offer of compensation in accordance with applicable legal requirements.

Scope of application

A copy of the FCA's Dear CEO Letter is available here: https://www.fca.org.uk/publication/correspondence/british-steel-. SME managers should take into account the expectations set out in the FCA's Dear CEO Letter when complying with their regulatory obligations.

Duration of application

Financial resilience assessment

However, the methodology is intended to provide the company and the FCA with an estimate of the company's BSPS recovery obligations and the resulting impact on its financial resilience. For the purposes of this chapter, the result of the calculation in (1) is known as the ‘assessment of financial resilience’.

Regulatory capital

2) ■CONRED 3.2.4AR(2) explains when a business may stop counting a settlement case toward N. It works by referring to stages of the consumer redress settlement in ■CONRED 4, and certain letters made under of the scheme must be sent. Since these cases do not need to be resolved in accordance with the prescriptive rules in■CONRED 4, we allow a company to exclude non-settlement cases in scenarios similar to those in.

Average liability for unsuitable BSPS advice

For example, where a case is excluded from the redress scheme because the firm has appointed a skilled person to carry out a previous business review and the firm has communicated to the consumer that the advice was suitable, a firm may consider this case of N excluded if 6 months have passed without a complaint to the Ombudsman, or if the Ombudsman rejects the complaint. Correction calculation – information not provided) in accordance with the requirements in■CONRED 4; (B) the firm has calculated the amount of correction due.

Notification requirements

Asset restriction

The asset constraint therefore allows any transaction, as long as a firm calculates it, using the methodology. The FCA expects that this will generally be sufficient to allow a firm to interpret the asset limit.

Responsibilities of SMF managers

However, from time to time a firm may feel the need for individual guidance from the FCA.

The asset restriction

1) ■CONRED 3.3.3R contains a restriction ('asset restriction') which prevents the company from carrying out transactions that could result in the dispersion of the value of the company's assets, except to the extent that an exception in ■CONRED 3.3.3R applies (1)or (2).

Transactions in the ordinary course of business

Payment of dividends and LLP members’ drawings

The company must also confirm to the FCA that the payment of the dividend or withdrawals will be lawful, taking into account any relevant. restrictions that may apply in areas such as company law or insolvency law. Dividend payments which allow a company to increase its statutory capital over time and which support the company in passing the assessment of the financial robustness of ■CONRED 3.2.2Rover a.

Transactions not in the ordinary course of business

A firm must provide this information by:. a) providing financial forecasts showing the expected change in the firm's regulatory capital over time; and. The effect of■CONRED 3.3.3Risks that a firm which has not notified the FCA that it is able to meet all BSPS requirements under its financial resilience assessment under■CONRED 3.2.2R will not carry out any of the types of transactions that listed in ■CONRED 3.3 must not undertake .8R.

Prior notification of other transactions in the ordinary course of business

British Steel Consumer

Application and subject matter of the scheme

Definitions used in this chapter

17) “Settlement Case” is a case that falls within the subject matter of the Settlement and that satisfies each of the conditions in■CONRED 4.2.2R, as amended by. (18) "settlement effective date" means 28 February 2023 and is the effective date of the consumer redress regime created by this Chapter;

Application to firms which gave advice about a pension transfer

12) 'material information gap' means the failure to collect the necessary information that prevents the company from completing an information section in the information section of the BSPS DBAAT and, as a result, it is not possible to assess the suitability of the advice;. (21) 'two advisor model' means a scheme where one company advises on pension transfers and another company advises on the proposed scheme.

Application to persons who have assumed a firm’s liabilities

Impact of complaints to the Financial Ombudsman Service on scheme deadlines

Summary of the scheme

First step: identify scheme cases

A consumer redress scheme identifying examples of the scheme. a) the consumer's BSPS pension was transferred on or after November 24, 2016; or b) before November 24, 2019, the consumer did not know and could not reasonably be expected to know that he had grounds for a claim; or a) the consumer's BSPS pension was transferred on or after 24 November 2017; or b) before November 24, 2017, the consumer did not know and could not reasonably be expected to know that he had a reason for a claim.

Guidance on excluded scheme cases

Second step: send letters to consumers

Third step: acknowledge opt-outs

Consumer redress scheme: case review

No later than 7 months from the scheme's effective date, a company must take the steps described in this section.

First step: case review

In accordance with ■CONRED 4.3.2R, a firm must have regard to the guidelines set out in the instructions in ■CONRED 4 Appendix 21R. Step two: cases of insufficient information. A firm may determine that a scheme case no longer falls within the scope of the consumer redress scheme established by this chapter if the firm:.

Obligation on firms connected with transfer advice

A company that, after completing the second step, has obtained sufficient information to determine the matters in■CONRED 4.3.5R(1) must proceed to complete the first step (case review) in accordance with■CONRED 4.3.2R .

Obligation to notify FCA of any failures to elicit response

General guidance on second step

Third step: case review letters to consumers

Suitable redress determinations: notification to the FCA

First step: calculate redress and send redress determination

Taking steps by or on behalf of FCA

If the FCA decides to make such a decision, a company can take the matter to the tribunal. The implementation of steps i■CONRED 4.2 to■CONRED 4.4 by or on behalf of the FCA does not affect the Financial Ombudsman Service's ability to deal with a complaint, in particular where the company has not sent a decision on appeals in accordance with the time limits specified under the consumer complaints scheme established by this chapter.

Supervision and delegation of scheme process by firms

Provisions relating to

Provisions relating to communications with other firms

Guidance on taking reasonable steps to ascertain missing information

When taking reasonable steps to identify missing information and when contacting the consumer, the company must:

Prohibition against influencing consumers against their interests

Deceased consumers

Consumer redress scheme

With respect to any matter relating to or relating to the consumer redress scheme established by this chapter, section 165 (the power of the FCA to request information: authorized persons, etc.) of the Act and any provision of Part XI (Information Collection and Investigation) of the Act relating to that Part applies to any company (or person in■CONRED 4) that is not.

Ongoing reporting requirements

In relation to any matter relating to or related to the consumer redress scheme created by this chapter, section 165 (FCA's power to search. If the firm is to send an encrypted email to the FCA, it must use Egress Switch encryption software.

Consumer Redress Scheme

Record-keeping requirements

British Steel Annex 1 Consumer Redress Scheme

4Redress determination: consumers outside scope/confirming exclusion

Annex 1/2

4Consumer within scope/confirming inclusion

Annex 2/2

4Redress determination: confirmation of consumer opt-out

Annex 3/2

4Further information request (1): initial request

Annex 4/2

4Further information request (2): final reminder

Annex 5/2

4Redress determination: further information not provided

Annex 6/2

4Notification of finding of unsuitable advice

Annex 7/2

4Redress determination: unsuitable advice, no causation

Annex 8/2

4Redress determination: suitable advice

Annex 9/2

4Redress calculation, further information: initial request

Annex 10/2

4Redress calculation, further information request: final reminder

Annex 11/2

4Redress determination: Redress calculation – information not provided

Annex 12/2

4Redress determination: Result of redress calculation

Annex 13/2

4Request for detailed calculation report

Annex 14/2

4Payment confirmation

Annex 15/2

4Final reminder to accept offer

Annex 16/2

4Redress Determination: payment acceptance not provided

Annex 17/2

4Summary of scheme flow diagram [CONRED 4.1.11G]

Annex 18/2

4Form of Attestation for use of FCA DBAAT

Annex 19/2

4BSPS DBAAT

Annex 20/2

4BSPS DBAAT and BSPS Redress Calculator Instructions

Annex 21/2
Annex 21/4
Annex 21/6
Annex 21/8

11) 'Information Section' is a tab in the BSPS DBAAT Excel Spreadsheet which collects information about a company's compliance with information requirements relevant to the suitability assessment;. 19) 'Suitability section' is a tab in the BSPS DBAAT Excel spreadsheet that records an assessment of a company's compliance with suitability requirements;.