CONRED 4.4 Consumer redress scheme: calculating and paying redress

1. (1)

   1A firm must make a redress determination pursuant to CONRED 4.4.2R or CONRED 4.4.20R where it has determined that the advice provided to the consumer did not comply with the suitability requirements and has answered ‘yes’ to the causation question. Subject to (2), the firm must:

   1. (a)

      not take the first step of calculating and sending the redress determination pursuant to CONRED 4.4.2R until after 1 April 2023; and

   2. (b)

      make such redress determination no later than 10 months from the scheme effective date.

2. (2)

   The deadline to make the redress determination referred to in (1)(b) is extended to 12 months from the scheme effective date where a consumer has:

   1. (a)

      requested that the firm calculate the redress sum that would be payable by full or partial augmentation; or

   2. (b)

      claimed for an amount described at CONRED 4.3.14R(1)(b)(iii)(C).

1The first step is for a firm to calculate the amount of redress owed to a consumer:

1. (1)

   in accordance with the relevant rules and guidance set out in DISP App 4 and DISP App 4 Annex 1, as modified by CONRED 4;

2. (2)

   by completing the BSPS calculator in accordance with the instructions set out in CONRED 4 Annex 21R;

3. (3)

   where requested by a consumer, by calculating the redress sum that would be payable by full or partial augmentation outside of the BSPS calculator in accordance with (1);

and send the consumer a redress determination in the form of the letter set out in CONRED 4 Annex 13R.

1A redress determination in the form of the letter set out in CONRED 4 Annex 13R must include the following:

1. (1)

   a copy of a summary report from the BSPS calculator as well as an offer to provide a detailed calculation report from the BSPS calculator if requested by the consumer;

2. (2)

   the information at DISP App 4.3.38R to DISP 4.3.39R; and

3. (3)

   where the firm has reached an arrangement with the consumer as described at CONRED 4.4.9R(1)(b), a comprehensive summary of the instalments agreed.

1When a firm communicates a redress offer to a consumer, it should:

1. (1)

   take reasonable steps to communicate in a way that is fair, clear and not misleading;

2. (2)

   take into account the information needs of the consumer, including their understanding of financial services; and

3. (3)

   where possible, use plain language and avoid the use of jargon, unfamiliar or technical language.

1Where a consumer requests a copy of the detailed calculation report from the BSPS calculator, a firm must send a letter enclosing such report in the form of the letter set out in CONRED 4 Annex 14R within 5 business days of receiving such request.

1Where a firm determines that redress is payable to a consumer and the firm has not received a claim from the consumer within 4 weeks of a redress determination being sent pursuant to CONRED 4.4.2R, the firm must:

1. (1)

   within 5 business days, send a further letter to the consumer in the form set out in CONRED 4 Annex 16R; and

2. (2)

   if there is no response to the redress determination in CONRED 4.4.2R within 3 months, send a letter to the consumer in the form set out in CONRED 4 Annex 17R within 5 business days of the 3 months expiring.

1Unless CONRED 4.4.10R applies, a firm must pay the redress determined payable to a consumer:

1. (1)

   either:

   1. (a)

      within 28 days of receiving a claim from the consumer for the redress determined to be payable; or

   2. (b)

      as agreed with the consumer pursuant to any arrangement providing for the payment of redress in instalments over one or more tax years pursuant to DISP App 4.4.31G(4)(c);

2. (2)

   in accordance with the instructions set out by the consumer in their response to the redress determination in which they make their claim;

3. (3)

   including an additional compensation sum which:

   1. (a)

      is payable to provide redress for the period between the valuation date referred to in CONRED 4 Annex 21 13.1R(16) and the payment date; and

   2. (b)

      must be calculated using the BSPS calculator in accordance with DISP App 4.3.29(3); and

4. (4)

   accompanied by a confirmation in the form of the letter set out in CONRED 4 Annex 15R including, where appropriate, a comprehensive summary of any arrangement with the consumer as described at CONRED 4.4.9R(1)(b).

1A firm does not need to pay redress or otherwise comply with the requirements in CONRED 4.4.9R where the consumer did not send a claim for it within 3 months of the date of the redress determination in CONRED 4.4.2R, unless the firm is required to extend the validity of the redress calculation in accordance with DISP App 4.3.25R.

1. (1)

   1A firm must complete the steps at (2) where a consumer makes a complaint to the Financial Ombudsman Service in respect of a redress determination made under CONRED 4.4.2R and either of the following apply:

   1. (a)

      the firm and the consumer agree pursuant to DISP 3.5.1R that the redress determination was correct; or

   2. (b)

      the firm receives notification from the Financial Ombudsman Service in accordance with DISP 3.6.6R(5) upholding the redress determination.

2. (2)

   Within 2 weeks of the date where either the firm and the consumer reach agreement under (1)(a) or the firm receives the notification under (1)(b), the firm must:

   1. (a)

      recalculate the amount of redress owed to the consumer pursuant to CONRED 4.2.2R in accordance with CONRED 4 Annex 21 13.15R(2); and

   2. (b)

      make a further redress determination pursuant to CONRED 4.2.2R in the form of the letter set out in CONRED 4 Annex 13R with an adaptation to the letter to explain the circumstances in which the further redress determination is being made.

1After the expiry of the 28-day period in CONRED 4.4.9R(1)(a) or in the case of an arrangement referred to at CONRED 4.4.9R(1)(b) after the expiry of the payment period for each instalment, the redress may be recovered as a debt due to the consumer and, in particular, may:

1. (1)

   if a county court so orders in England and Wales, be recovered by execution issued from the county court (or otherwise) as if it were payable under an order of that court; or

2. (2)

   be enforced in Northern Ireland as a money judgment under the Judgments Enforcement (Northern Ireland) Order 1981; or

3. (3)

   be enforced in Scotland as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.

[Note: This rule is imposed by the FCA using the powers granted to it under section 404A(1)(m) of the Act to make rules providing for the enforcement of any redress under a consumer redress scheme.]

1The second step applies in respect of a scheme case where:

1. (1)

   a firm has not received a response:

   1. (a)

      from a consumer (‘C’) to a letter sent in accordance with CONRED 4.3.14R(1)(b) within 2 weeks of the letter being sent; or

   2. (b)

      from another party to a letter sent in accordance with CONRED 4.3.14R(1)(c) or (d) within 2 weeks of the letter being sent; or

2. (2)

   a consumer requests that the firm calculate the redress sum that would be payable by full or partial augmentation.

1To complete the second step, a firm must take the following actions:

1. (1)

   Where CONRED 4.4.13R(1) applies within 5 business days of:

   1. (a)

      the 2 weeks in CONRED 4.4.13R(1)(a) expiring, send a further letter in the form set out in CONRED 4 Annex 11R to the consumer and allow the consumer at least 2 weeks to respond; and

   2. (b)

      the 2 weeks in CONRED 4.4.13R(1)(b) expiring, send a further letter to the parties in CONRED 4.3.14R(1)(c) requesting the applicable information and allow the parties at least 2 weeks to respond.

2. (2)

   Where CONRED 4.4.13R(2) applies, within 5 business days of receiving a request from a consumer to calculate the redress sum that would be payable by full or partial augmentation:

   1. (a)

      send a letter to the applicable parties in CONRED 4.3.14R(1)(c) requesting the information at CONRED 4.3.14R(2) and allow at least 2 weeks to respond; and

   2. (b)

      if no reply is received to the letter at (a), send a further letter to the applicable parties within 5 business days of the expiry of the applicable deadline at (a) with a further reminder to provide the applicable information and allow at least 2 weeks to respond.

3. (3)

   If a reply is received from the consumer or the parties specified in CONRED 4.3.14R(1)(c) in respect of any information request in connection with the calculation of redress but the information it contains is insufficient to calculate redress in accordance with CONRED 4.4.2R, the firm should take all reasonable steps to obtain further information from the consumer or, where applicable, any other parties in CONRED 4.3.14R(1)(c).

1A firm which, having carried out the second step, has sufficient information to complete the redress calculation using the BSPS calculator and, where requested by the consumer, the redress sum that would be payable by full or partial augmentation, must then complete the first step in accordance with CONRED 4.4.2R.

1Where a consumer has requested a firm calculate the redress sum that would be payable by full or partial augmentation or an amount described at CONRED 4.3.14R(1)(b)(iii)(C), but the firm does not have sufficient information to make such calculations having taken the applicable steps at CONRED 4.4.13R, the firm must proceed to calculate only the redress calculation using the BSPS calculator in accordance with CONRED 4.4.2R (excluding any amount claimed as described at CONRED 4.3.14R(1)(b)(iii)(C)).

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 taken all reasonable steps to obtain further information from the consumer and the parties specified in CONRED 4.3.14R(1)(c); and

2. (2)

   does not have sufficient information to calculate redress using the BSPS calculator.

1A firm must not make a determination pursuant to CONRED 4.4.18R only because, following a request from a consumer, it does not have sufficient information to calculate either or both the redress sum that would be payable by full or partial augmentation or any amount described at CONRED 4.3.14R(1)(b)(iii)(C).

1A firm must promptly send a consumer a redress determination in the form set out in CONRED 4 Annex 12R if it determines, in accordance with CONRED 4.4.18R, that the scheme case no longer falls within the subject matter of the consumer redress scheme created by this chapter.

1A firm receiving a request for information pursuant to CONRED 4.3.14R or CONRED 4.4.14R 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.

1A firm that has sent a reminder to an initial information request to another firm in accordance with CONRED 4.4.14R and has not received a response to that letter within 4 weeks of it being sent, must notify the FCA of this failure at BSPSnotifications@fca.org.uk within 5 business days of the 4 weeks elapsing.