CII R01 Complaints Handling 4 — Questions and Answers
Question 1: What is 'redress' in the context of complaints?
- A formal apology only
- Compensation or remedial action to put the customer back in the position they would have been in without the firm's error (Correct answer)
- A refund of all fees ever paid to the firm
- A written warning to the staff member involved
Correct answer: Compensation or remedial action to put the customer back in the position they would have been in without the firm's error
Redress aims to put the customer back in the position they would have been in had the error or failing not occurred. This may include financial compensation, correcting an error, or other remedial action as appropriate.
Question 2: What is a 'past business review' in relation to complaints?
- An annual review of the firm's business plan
- A review of past sales or advice to identify and remediate cases where customers may have been harmed (Correct answer)
- A review of historical market data
- An audit of the firm's past financial statements
Correct answer: A review of past sales or advice to identify and remediate cases where customers may have been harmed
A past business review involves a firm proactively reviewing its past sales, advice, or other activities to identify cases where customers may have been treated unfairly or suffered loss, and providing appropriate redress.
Question 3: What is the difference between 'upheld' and 'rejected' complaints?
- Upheld means the firm won; rejected means the customer won
- Upheld means the firm found in the complainant's favour; rejected means the firm did not accept the complaint (Correct answer)
- They mean the same thing
- Upheld means referred to the FOS; rejected means resolved internally
Correct answer: Upheld means the firm found in the complainant's favour; rejected means the firm did not accept the complaint
An upheld complaint is one where the firm has found in favour of the complainant and typically offers redress. A rejected complaint is one where the firm has not accepted the complaint after investigation.
Question 4: What is the FCA's position on firms using 'non-disclosure agreements' (NDAs) in complaint settlements?
- NDAs are encouraged to protect commercial confidentiality
- The FCA has stated that NDAs should not be used to prevent consumers from speaking to the FCA, FOS, or other regulators (Correct answer)
- NDAs are required for all settlements over £1,000
- The FCA has no position on NDAs
Correct answer: The FCA has stated that NDAs should not be used to prevent consumers from speaking to the FCA, FOS, or other regulators
The FCA has made clear that firms should not use NDAs or confidentiality clauses to prevent consumers from contacting or cooperating with the FCA, FOS, or other regulators. Such clauses should not be used to silence whistleblowers or complainants.
Question 5: What is 'remediation' in the context of widespread complaints about a product?
- Withdrawing the product from sale
- A proactive programme to identify and compensate all affected customers, not just those who have complained (Correct answer)
- Changing the product's marketing materials
- Offering the product at a reduced price
Correct answer: A proactive programme to identify and compensate all affected customers, not just those who have complained
Remediation involves a firm proactively identifying all customers affected by an issue and providing appropriate compensation or correction, not just responding to individual complaints. The FCA often requires remediation for widespread failings.
Question 6: What are 'super-complaints' under the FCA?
- Complaints about very large financial losses
- Complaints submitted by designated consumer bodies about features of the market that are significantly damaging consumer interests (Correct answer)
- Complaints that have been escalated multiple times
- Complaints made by MPs on behalf of constituents
Correct answer: Complaints submitted by designated consumer bodies about features of the market that are significantly damaging consumer interests
Super-complaints can be made by designated consumer bodies (such as Which? or Citizens Advice) to the FCA about features of the market for financial services that are or appear to be significantly damaging the interests of consumers.
CII R01 Complaints Handling 4
What is 'redress' in the context of complaints?