Free CeMAP 1 Quiz Test Unit 2 Topic 25

1 / 16

Ruth lost £90,000 when a UK investment firm became insolvent. What is the MAXIMUM amount that the Financial Services Compensation Scheme will pay her in compensation?

£54,000

£42,000

£85,000

£60,000

2 / 16

David’s car insurer has gone out of business and he has lost £2,000 on his compulsory third party policy. How much compensation if any may he be entitled to receive from the FSCS?

£2,000

£1,000

£1,800

none

3 / 16

John held deposits with Bank A and Bank B and they were both declared insolvent on 1 May 2018. The FSCS paid a higher amount of compensation for his holdings with Bank A because:

John had £100,000 saved with Bank A and £90,000 with Bank B

John had £70,000 in a joint account with his brother with Bank A and £70,000 in his sole name in Bank B

Bank B had recently made the annual interest payment on John’s account

John and his wife held £150,000 in a joint account in Bank A and £70,000 in his sole name in Bank B

4 / 16

Which of the following statements best describes the situation applying where a contract is found to contain a term that is deemed to be unfair?

The whole contact will be invalid

As long as it is practical, the rest of the contract can continue

The business can choose to bind the consumer to the contract

The contract will continue as specified

5 / 16

Which one of the following is NOT true in relation to the rules relating to the Financial Ombudsman Service?

The maximum pay out under the FOS for events before April 2019 is £160,000.

All complaints must be investigated where possible by someone of sufficient competence who is not directly involved.

Authorised firms have to pay a case fee of £500 for every complaint that goes to the FOS

Records of complaints have to be kept for at least three years

6 / 16

Jason has just made a complaint alleging that his personal pension plan was mis-sold to him. He has complained to the pension company initially and has received a final response letter. Who should he now take this complaint to?

The Pensions Ombudsman

The Pensions Advisory Service

The Prudential Regulatory Authority

The Financial Ombudsman Service A

7 / 16

Jane opens a deposit account with the Moorland Building Society and deposits £10,000. She is worried about the money if the building society goes out of business. If this were to happen, how much would she receive from the Financial Services Compensation Scheme?

£8,400

£10,000

£8,000

£9,000

8 / 16

Regulations established under the Financial Conduct Authority require firms to make a commitment to try to resolve complaints within:

3 working days

3 months

8 weeks

1 month

9 / 16

The Financial Ombudsman Service deals with unresolved complaints in respect of:

Bank of England Base Rate

administration of occupational pension scheme complaints

LIBOR

general insurance brokers

10 / 16

Which of the following claims would be covered by the Financial Services Compensation Scheme?

Damian, who is talking to his motor insurer about an accident with an uninsured driver

Mike whose complaint about investment advice was upheld but not honoured due to the default of his adviser

David who has claimed against his high street bank for the advice he received about PPI cover

Paul who is claiming in relation to his offshore investment with a bank in the Isle of Man

11 / 16

On the insolvency of an authorised investment firm, the MAXIMUM that could be paid out to an individual investor from the Financial Services Compensation Scheme would be:

100% of the first £20,000 plus 90% of the next £30,000

100% of the first £20,000 plus 90% of the next £50,000

100% of the first £85,000

100% of the first £50,000

12 / 16

The Financial Services Compensation Scheme will pay out compensation to customers who have:

been mis-sold a personal pension plan

lost money through the mis-management of an investment fund

been mis-sold a mortgage endowment policy

lost money through the insolvency of an authorised firm

13 / 16

The Pensions Ombudsman may deal with unresolved complaints in respect of:

personal pension schemes

the administration of occupational pension schemes

Stakeholder pension schemes

state pensions

14 / 16

Which one of the following is NOT one of the areas covered by the rules on unfairness as detailed in the Consumer Rights Act 2015?

The contract should be made in good faith

The terms should be fair

There must be insurable interest

he contract should be transparent

15 / 16

Which one of the following is FALSE regarding complaints referred to an Ombudsman?

The Ombudsman’s decision is binding on the company

The company involved should investigate the complaint before the Ombudsman

The company will often take the matter to court following the Ombudsman’s ruling.

The Ombudsman can give awards of up to £350,000 plus interest and costs for complaints relating to events after 1 April 2019

16 / 16

What is the effect of the final response letter for a customer who is in the process of making a complaint about a financial services product they have bought?

They can now take the complaint to the Financial Ombudsman Service

They will now have to take legal action to obtain redress

The customer will have to pay to progress the complaint further

The Financial Ombudsman Service has found their complaint frivolous