Content Options

Content Options

View Options


You are viewing the version of the document as on 2023-11-28.

CONRED 4.3 Consumer redress scheme: case review

Deadline to complete the steps in this section

CONRED 4.3.1R

1No later than 7 months from the scheme effective date, a firm must take the steps set out in this section.

First step: case review

CONRED 4.3.2R
  1. (1)

    1The first step is for a firm to carry out a review of each scheme case (‘a case review’).

  2. (2)

    A case review must be carried out by:

    1. (a)

      completing the BSPS DBAAT at CONRED 4 Annex 20R, in accordance with the instructions set out in CONRED 4 Annex 21R; or

    2. (b)

      using a FCA DBAAT that was completed by the firm prior to the scheme effective date.

  3. (3)

    Where a BSPS DBAAT is used:

    1. (a)

      it must be accompanied by an attestation in the form specified in the BSPS DBAAT; and

    2. (b)

      the attestation in (a) must be made by an individual approved to perform the SMF16 (Compliance oversight) FCA controlled function for the firm or by an individual approved to perform another appropriate senior management function within the firm.

  4. (4)

    If a FCA DBAAT is used to carry out a case review:

    1. (a)

      it must be accompanied by an attestation in the form specified in CONRED 4 Annex 19R; and

    2. (b)

      the attestation in (a) must be made by an individual approved to perform the SMF16 (Compliance oversight) FCA controlled function for the firm or by an individual approved to perform another appropriate senior management function within the firm in accordance with the instructions set out at CONRED 4 Annex 21R 12.2 and 12.3.

CONRED 4.3.3E

1Non-compliance with any of the evidential provisions set out in the instructions at CONRED 4 Annex 21R may be relied upon as tending to establish contravention of CONRED 4.3.2R.

CONRED 4.3.4G

1In complying with CONRED 4.3.2R, a firm should have regard to the guidance set out in the instructions at CONRED 4 Annex 21R.

Second step: cases of insufficient information

CONRED 4.3.5R
  1. (1)

    1The second step applies only in respect of a scheme case where a firm has attempted to comply with the first step (case review) but does not have sufficient information to determine:

    1. (a)

      whether it has failed to comply with any of the suitability requirements;

    2. (b)

      the causation question; or

    3. (c)

      both (a) and (b).

  2. (2)

    To complete the second step, a firm must take the following actions:

    1. (a)

      within 5 business days of determining that a scheme case falls within (1), send a letter in the form set out in CONRED 4 Annex 4R to the consumer including, where necessary, a request that the consumer completes a letter of authority to authorise the firm to obtain further information on their behalf;

    2. (b)

      within 5 business days of receiving any completed letter of authority from the consumer or at the same time as sending the letter in (a) if the firm already has such authority, send a letter requesting the information in CONRED 4 Annex 4R to one of the following and allow at least 2 weeks to respond:

      1. (i)

        in a scheme case involving a two-adviser model, the firm which provided the advice on the proposed arrangement; or

      2. (ii)

        in all other cases, any other firm that was involved in the BSPS pension transfer;

    3. (c)

      if no reply is received by the firm within 2 weeks of a letter in (a) being sent:

      1. (i)

        within 5 business days of the 2 weeks expiring, send a further letter to the consumer in the form set out in CONRED 4 Annex 5R and allow the consumer at least 2 weeks to respond; and

      2. (ii)

        within 5 business days of receiving the completed letter of authority from the consumer, where relevant, send a letter to the firms in (b)(i) or (ii) requesting the necessary information and allow the firms at least 2 weeks to respond;

    4. (d)

      if no reply is received by a firm within 2 weeks of a letter in (b) or (c)(ii) being sent, within 5 business days of the 2 weeks expiring, send a further letter to the applicable firms requesting the necessary information and allow the firms at least 2 weeks to respond;

    5. (e)

      if no reply is received by a firm to the letters in (c)(i) or (d), take all reasonable steps to contact the consumer or, where applicable, any other firm by other means; and

    6. (f)

      if a reply is received from the consumer or a firm to whom a letter was sent in accordance with this rule but that reply contains insufficient information to determine the matters in (1), the firm must take all reasonable steps to obtain further information from the consumer or, where applicable, any other firm in (b).

CONRED 4.3.6R

1A firm which, having carried out the second step, has acquired 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.

CONRED 4.3.7R

1A firm may determine a scheme case no longer falls within the subject matter of the consumer redress scheme created by this chapter if the firm:

  1. (1)

    has carried out the second step in relation to a scheme case; and

  2. (2)

    still does not have sufficient information to complete the first step.

CONRED 4.3.8R

1Where CONRED 4.3.7R applies, a firm must:

  1. (1)

    rate the case ‘non-compliant – material information gap’ in the BSPS DBAAT or ‘not-compliant-unclear’ in the FCA DBAAT (as appropriate);

  2. (2)

    complete the attestation in CONRED 4.3.2R(3) or (4) (as appropriate); and

  3. (3)

    promptly send the consumer a redress determination in the form set out in CONRED 4 Annex 6R.

CONRED 4.3.9G

1Where a firm has sent a consumer a redress determination pursuant to CONRED 4.3.8R(3), the firm should handle any subsequent complaint from a consumer in relation to advice about a BSPS pension transfer other than in respect of a redress determination in accordance with the complaint handling rules in DISP.

Obligation on firms connected with transfer advice

CONRED 4.3.10R

1A firm receiving a request for information pursuant to CONRED 4.3.5R(2)(b), CONRED 4.3.5R (2)(c)(ii) or CONRED 4.3.5R(2)(d) must take all reasonable steps to locate and provide the information requested within any reasonable time periods requested and, in any case, no later than 4 weeks after receiving the request.

Obligation to notify FCA of any failures to elicit response

CONRED 4.3.11R

1A firm that has sent a further letter to another firm in accordance with CONRED 4.3.5R(2)(d) and has not received a response to that letter within 4 weeks must notify the FCA of this failure at BSPSnotifications@fca.org.uk promptly and, in any case, within 5 business days of the 4 weeks elapsing.

General guidance on second step

CONRED 4.3.12G

1Scheme cases to which the second step (in CONRED 4.3.5R (cases of insufficient information)) applies are likely to be exceptional, having regard to the record-keeping requirements applicable to authorised persons under FCA rules (notably COBS 9.5, which requires firms to retain records relating to the suitability of pension transfers indefinitely and record keeping requirements in SYSC).

CONRED 4.3.13G
  1. (1)

    1A firm should not refuse to consider a scheme case if there is sufficient information to conclude that it was likely that the advice did not comply with the suitability requirements (but there is insufficient information to conclude that the advice complied with the suitability requirements).

  2. (2)

    A firm that has sufficient information to assess whether it complied with the suitability requirements should not refuse to answer the causation question unless there are reasonable grounds for requiring further information from the consumer to identify what they would have done if the advice met the suitability requirements.

Third step: case review letters to consumers

CONRED 4.3.14R
  1. (1)

    1Where a firm concludes that the advice provided to a consumer did not comply with the suitability requirements and has answered ‘yes’ to the causation question in the BSPS DBAAT or FCA DBAAT, it must:

    1. (a)

      send the consumer a letter in the form set out in CONRED 4 Annex 7R; and

    2. (b)

      send the consumer a letter in the form set out in CONRED 4 Annex 10R, including:

      1. (i)

        a list of any of the information set out in paragraph 13.30R of CONRED 4 Annex 21R which is required to complete the redress calculation using the BSPS calculator and which the firm does not already have;

      2. (ii)

        if the consumer has not already provided the firm with authority to enable the firm to collect information from third parties on the consumer’s behalf, a request that the consumer provide such authority;

      3. (iii)

        a request that the consumer respond to the firm to:

        1. (A)

          confirm whether they require the firm to calculate the redress sum that would be payable by full or partial augmentation;

        2. (B)

          where the consumer requires the firm to calculate the redress sum at (A), provide any information set out at (2) which the firm does not already have;

        3. (C)

          confirm whether they wish to claim as part of a secondary compensation sum any other consequential losses as described in CONRED 4 Annex 10R; and

        4. (D)

          where the consumer does wish to claim an amount described in (C), provide the necessary information as set out in CONRED 4 Annex 10R;

    3. (c)

      where a firm already has authority from the consumer, at the same time as sending the letter in (b), as necessary, send one or more letters requesting the information in (b)(i) to:

      1. (i)

        in a scheme case involving a two-adviser model, the firm which provided the advice on the proposed arrangement;

      2. (ii)

        any other firm that was involved in the BSPS pension transfer or which may hold relevant information (including the provider of the consumer’s DC pension arrangement and defined benefit occupational pension scheme); and

      3. (iii)

        HMRC and DWP; and

    4. (d)

      where a firm does not have authority at the time of sending the letter at (b) but subsequently receives a letter of authority, send an information request to any of the applicable parties as required by (c)(i) to (iii) within 5 business days of receipt of the letter of authority.

  2. (2)

    The information to calculate the redress sum that would be payable by full or partial augmentation is:

    1. (a)

      the consumer’s relevant earnings in the current tax year;

    2. (b)

      the value of all pension contributions already made in the current tax year;

    3. (c)

      whether the redress payment would result in the consumer’s unused annual allowance in the current and previous 3 tax years being exceeded;

    4. (d)

      the expected value of all pensions held by the consumer up to the age of 75;

    5. (e)

      any lifetime allowance protections secured by the consumer;

    6. (f)

      any applicable lifetime allowance protection enhancement factors;

    7. (g)

      any benefit crystallisation events; and

    8. (h)

      whether the consumer’s money purchase annual allowance has been triggered.

  3. (3)

    Where a firm concludes that the advice provided to a consumer did not comply with the suitability requirements, but has answered ‘no’ to the causation question in the BSPS DBAAT or FCA DBAAT, the firm must send the consumer a redress determination in the form set out in CONRED 4 Annex 8R.

  4. (4)

    Where a firm concludes that the advice provided to a consumer complied with the suitability requirements, it must:

    1. (a)

      send the consumer a redress determination in the form set out in CONRED 4 Annex 9R; and

    2. (b)

      take the steps in CONRED 4.3.15R to notify the FCA.

Suitable redress determinations: notification to the FCA

CONRED 4.3.15R
  1. (1)

    1Where a firm concludes that its advice to a consumer was suitable, it must notify the FCA of the following information:

    1. (a)

      the outcome of the firm’s redress determination; and

    2. (b)

      the consumer’s name, address, telephone number(s) and, where available, email address.

  2. (2)

    A firm must comply with the requirement in (1) to notify the FCA in the next progress report required under CONRED 4.8.2R(2), which is due following the ‘opt-out deadline’ in (3).

  3. (3)

    The opt-out deadline is the date which falls 2 weeks after the date when the redress determination required by CONRED 4.3.14R(4)(a) is sent by the firm to the consumer.

  4. (4)

    The requirement in (1) does not apply if the consumer has informed the firm in writing that they do not wish for their details to be passed to the FCA.