1This part of the FCA Handbook relates principally to consumer redress schemes. For these purposes, a consumer redress scheme is a set of rules under which a firm is required to take one or more of the following steps:
investigate whether, on or after a specified date, the firm has failed to comply with particular requirements that are applicable to an activity it has been carrying on;
determine whether the failure has caused (or may cause) loss or damage to consumers; and
if the firm determines that the failure has caused (or may cause) loss or damage to consumers, the firm must:
determine what the redress should be in respect of the failure; and
make the redress to the consumers.
Chapter 1 contains guidance on consumer redress schemes in general and explains what they are and the circumstances in which the FCA may impose a requirement to establish and operate a consumer redress scheme. The rules and guidance relating to particular consumer redress schemes are set out in the remainder of the sourcebook.
CONRED 1.2 to 1.7 explain the power in section 404 of the Act which enables the FCA to make rules requiring firms to establish and operate consumer redress schemes. Unless the context otherwise requires, references to consumer redress scheme in CONRED 1.2 to 1.7 are references to a scheme established under section 404 of the Act (that is, a scheme falling within paragraph (a) of the Glossary definition) and references to a “scheme” in those sections should be read accordingly.
CONRED 1.8 explains the circumstances in which the FCA can impose a requirement on a firm under section 404F(7) to establish and operate a scheme that corresponds to or is similar to a scheme under section 404 of the Act. Unless the context otherwise requires, references to consumer redress scheme in CONRED 1.8 are to a scheme established under section 404F(7) of the Act (that is, a scheme falling within paragraph (b) of the Glossary definition) and references to a “scheme” in that section should be read accordingly.
The term “consumer” has a number of different meanings both in the Glossary and in the Act. For this reason, except where indicated, CONRED does not use the term as defined in the Glossary. However, CONRED 1.4.6G to 1.4.14G explains which consumers can be covered by a consumer redress scheme established under section 404 of the Act.