Consumer Protection Flashcards

What is the FCA's Consumer Duty and when did it come into force?

Answer: A mandatory standard requiring firms to deliver good outcomes for retail customers, effective July 2023

The Consumer Duty (Principle 12) came into force on 31 July 2023 for open products and services, requiring firms to act to deliver good outcomes for retail customers across four key areas.

What are the four outcomes the Consumer Duty focuses on?

Answer: Products and services, price and value, consumer understanding, consumer support

The Consumer Duty focuses on four outcomes: products and services, price and value, consumer understanding, and consumer support, ensuring firms deliver good outcomes across these areas.

What is the Financial Ombudsman Service (FOS)?

Answer: An independent body that resolves disputes between consumers and financial firms

The FOS is an independent body set up by Parliament to resolve disputes between consumers and financial businesses. It provides an alternative to the courts and its decisions are binding on firms.

What is the current maximum award the Financial Ombudsman Service can make?

Answer: £430,000

The FOS can award up to £430,000 for complaints about acts or omissions by firms on or after 1 April 2024. This limit is reviewed periodically.

What is the Financial Services Compensation Scheme (FSCS)?

Answer: The UK's statutory deposit insurance and compensation scheme for customers of failed authorised firms

The FSCS is the UK's statutory compensation scheme that protects customers of authorised financial services firms that have failed. It is funded by levies on authorised firms.

What is the FSCS protection limit for deposits?

Answer: £85,000 per person per firm

The FSCS protects eligible deposits up to £85,000 per person per authorised firm. For joint accounts, each person is covered up to £85,000.