Schedule 2 - Part 3A of Schedule 17 to the 2000 Act
Consumer Credit Bill
5:30 pm
Gerry Sutcliffe (Parliamentary Under-Secretary (Employment Relations and Consumer Affairs), Department of Trade and Industry; Bradford South, Labour)
Schedule 2 will be inserted into schedule 17 of the Financial Services and Markets Act 2000. It sets out more detail about the operation of the consumer credit jurisdiction introduced by clause 59.
The schedule will require the FOS to make procedural rules for the operation of the consumer credit jurisdiction. The rules must set down a time limit within which complaints can be referred to ADR, which can be extended only by an ombudsman. The FOS can also require all holders of standard licences to establish and maintain internal complaints handling procedures, and it can make rules to say that a complaint will not be dealt with until the consumer has exhausted those procedures.
Within the rules, the FOS will set out the process to be followed for the reference of complaints, their investigation, their consideration and their determination by an ombudsman. The FOS will be able to dismiss frivolous or vexatious complaints and provide that, in the early stages, the complaint can be handled by a member of FOS staff other than the ombudsman.
The schedule enables the FOS to make rules specifying the fees that licensees must pay for the ADR scheme and provides that the payment of any compensation awarded by the ombudsman may be enforced through a court. It also sets out the procedure that the FOS must follow when making, amending or revoking any rules. The FOS is required to hold a public consultation before making any rules. Before the rules can be made final, they must be approved by the Financial Services Authority. The FOS must also take steps to make the approved rules available to the public. Finally, new paragraph 16F sets out the steps the FOS must take to verify the rules.
The schedule is necessary to ensure that the FOS rules and procedures are clear and comprehensive. It allows the FOS to make the rules it needs to ensure the ADR scheme is as effective and transparent as possible for both consumers and business.