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CONRED 2.5 Consumer redress scheme: case review

Deadline to complete the steps in this section

CONRED 2.5.1R

A firm:

  1. (1)

    in respect of any scheme case where the firm has received an opt-in by 22 July 2013, must take the steps set out in this section by 9 December 2013; and

  2. (2)

    in respect of any scheme case where the firm has received an opt-in later than 22 July 2013, must take the steps set out in this section if the consumer's failure to comply with that time limit was caused by exceptional circumstances; in such a case, the deadline in (1) is extended according to the length of the delay caused by the consumer's failure to comply with the time limit.

CONRED 2.5.2G

The guidance on exceptional circumstances at CONRED 2.6.3 G is relevant to CONRED 2.5.1R (2).

CONRED 2.5.3R
  1. (1)

    For any scheme case where the firm has received an opt-in, but the firm, does not consider CONRED 2.5.1R (2) requires it to take the steps set out in this section, and does not intend to do so, the firm must send the consumer a redress determination in the form set out in CONRED 2 Annex 6 R within 14 days of receiving the opt-in.

  2. (2)

    For any opted-in scheme case, the firm must send the consumer, within 14 days of receiving the opt-in, a letter in the form set out in CONRED 2 Annex 7 R.

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

CONRED 2.5.4R

The first step is to carry out a review (a case review) of each opted-in scheme case, by completing the template at CONRED 2 Annex 12 R, in accordance with the rules set out in the instructions at CONRED 2 Annex 13 .

CONRED 2.5.5E

Non-compliance with any of the evidential provisions set out in the instructions at CONRED 2 Annex 13 may be relied upon as tending to show contravention of CONRED 2.5.4 R.

CONRED 2.5.6G

In complying with CONRED 2.5.4 R, firms should have regard to the guidance set out in the instructions at CONRED 2 Annex 13 .

Second step: cases of insufficient information

CONRED 2.5.7R
  1. (1)

    The second step applies only in respect of an opted-in scheme case where a firm has attempted to comply with the first step (CONRED 2.5.4 R) but does not have sufficient information to determine all of the following matters:

    1. (a)

      whether it has failed to comply with any of the suitability requirements specified at paragraph 5.1R of CONRED 2 Annex 13 ;

    2. (b)

      if so, whether that failure has caused loss or damage to the consumer; and

    3. (c)

      if so, what the redress should be in respect of its failure.

  2. (2)

    The second step is to:

    1. (a)

      send the consumer a letter in the form set out in CONRED 2 Annex 8 R;

    2. (b)

      if no reply is received by the firm within four weeks of a letter in (a) being dispatched, the firm must send a letter to the consumer, within one further week, in the form set out in CONRED 2 Annex 9 R, and take all reasonable steps to contact the consumer by other means; and

    3. (c)

      if a reply is received from a consumer but the information it contains is insufficient to determine all the matters in (1), the firm should take all reasonable steps to obtain further information from the consumer.

[Note: see also CONRED 2.8.7 R.]

CONRED 2.5.8R

A firm which, having carried out the second step, has acquired sufficient information to determine all of the outstanding matters must then complete the first step (CONRED 2.5.4 R).

CONRED 2.5.9R

Where a firm has carried out the second step in relation to an opted-in scheme case (falling within CONRED 2.4.2 R) but still does not have sufficient information to determine all of the outstanding matters, the opted-in scheme case no longer falls within the subject matter of the consumer redress scheme created by this chapter. The firm must send the consumer a letter in the form set out in CONRED 2 Annex 10 R promptly on completion of the second step.

CONRED 2.5.10G

Opted-in scheme cases to which the second step (CONRED 2.5.7 R) applies are likely to be exceptional, having regard to the record-keeping requirements applicable to authorised persons under FCA rules (notably SYSC).

Third step: redress determination

CONRED 2.5.11R

The third step is to send the consumer a redress determination in the form of the letter set out in CONRED 2 Annex 11 R in respect of each opted-in scheme case.

Taking steps by or on behalf of FCA

CONRED 2.5.12R

The FCA may (on giving notice to the firm) take any of the steps in CONRED 2.3 to CONRED 2.5, instead of the firm, or may appoint one or more competent persons to do so on behalf of the FCA, if there is a material failure by the firm to take any of the actions required under this chapter, including where the firm informs the FCA that it is unable or unwilling to take any of those actions because to do so would be in breach of a condition of its professional indemnity insurance. In such a case, the firm must:

  1. (1)

    not carry out (or, as the case may be, continue) any of the steps to be taken by the FCA or competent person, unless so directed by them; and

  2. (2)

    render all reasonable assistance to the FCA or competent person (but any assistance, the rendering of which would invalidate the firm's professional indemnity insurance, is not reasonable for the purposes of this rule).

CONRED 2.5.13G

The FCA would expect a firm to make reasonable efforts to obtain the consent of its professional indemnity insurer to take the relevant steps, in line with its obligations under Principle 11 (Relations with regulators).

CONRED 2.5.14R

If, where the FCA or a competent person takes any steps under CONRED 2.5.12 R, the FCA proposes to make any determination of:

  1. (1)

    whether a failure by a firm has caused loss to a consumer; or

  2. (2)

    what the redress should be in respect of the failure;

the FCA must give the firm a warning notice specifying the proposed determination.

CONRED 2.5.15R
  1. (1)

    If the FCA decides to make a determination of the matters in CONRED 2.5.14 R, the FCA must give the firm a decision notice specifying the determination.

  2. (2)

    If the FCA decides to make such a determination, the firm may refer the matter to the Tribunal.

CONRED 2.5.16R

Part 26 of the Act (including the provisions as to final notices) applies in respect of notices given under CONRED 2.5.14 R and CONRED 2.5.15 R.

CONRED 2.5.17G

Where, under CONRED 2.5.12 R, the FCA (or a competent person) communicates with a customer (or consumer) instead of the firm, it will do so in its own name, making clear (in the case of a competent person) its authority from the FCA to do so.

CONRED 2.5.18G

Where the FCA (or a competent person), instead of the firm, carries out the third step in CONRED 2.5.11 R, it will do so no earlier than seven days after the issue of a final notice in respect of the FCA's decision to make a determination of the matters in CONRED 2.5.14 R, and will send the firm a copy of the consumer's response to the redress determination.

CONRED 2.5.19G

A fee is payable by the firm (or person falling within CONRED 2.1.2R (1)) in any case where the FCA exercises its powers under CONRED 2.5.12 R: see the table at FEES 3.2.7 R.

CONRED 2.5.20G

The completion of the steps in CONRED 2.3 to CONRED 2.5 by, or on behalf of, the FCA, as provided in CONRED 2.5.12 R, does not affect the ability of the Ombudsman to consider a complaint, in particular where the firm has not sent a redress determination in accordance with the time limits specified under the scheme.