“From 1 October 2015 the Consumer Rights Act 2015 (CRA) took effect… giving consumers enhanced and easier to understand rights on what should happen if a service is not provided in the manner agreed or with reasonable care and skill.”
Although the Act applies to a wide range of sectors (goods, digital content, and services), it is particularly relevant in financial advice and mortgage services where the client pays for professional input and guidance.
The CRA covers:
- Faulty goods or services
- Poorly delivered or misrepresented financial services
- Contracts containing unfair or unclear terms
Financial firms must either deliver services as agreed or, if not possible, offer a suitable remedy – often a refund.
Fairness, Transparency, and Good Faith
Three principles underpin the CRA’s approach to contracts between firms and consumers:
Fairness – Contract terms should not be one-sided. Any term that significantly disadvantages the consumer can be deemed void.
Transparency – Terms must be written in plain language. If there’s ambiguity, it will be interpreted in the consumer’s favour.
Good Faith – The agreement should not create an unfair balance of power. A term that imposes an unreasonable obligation on the consumer may breach good faith.
Understanding these principles will help you spot when a service or agreement might fall short of expected standards.
Dispute Resolution and the Move Away from Court Action
The CRA encourages alternative forms of dispute resolution to avoid unnecessary court cases. These include:
- Mediation – where a neutral third party helps both sides reach agreement.
- Adjudication – where a ruling can be appealed in court.
- Arbitration – where the ruling is binding and cannot be appealed.
In Revision Guide I use as part of my (Futuretrend) Training :
“One of the aims of the Act is to reduce the incidence of disagreements… and to reduce the number of such disputes ending in court action.”
These methods help financial services firms and consumers resolve disagreements faster and more constructively.
How Are Customers Protected in Financial Services?
The Financial Conduct Authority (FCA) plays a leading role in consumer protection. It sets out rules that firms must follow when dealing with customers – including complaint procedures and clear standards of conduct.
Some additional bodies support this mission:
The Money and Pensions Service (MaPS) – Offers debt advice, money guidance, and pension help.
Citizens Advice – Provides free, impartial support to consumers.
Which? – A consumer watchdog with ‘super complaint’ status in financial services, allowing it to escalate systemic issues.
These organisations educate and advocate for consumers, especially when dealing with complex financial decisions.
Complaints Procedures: What Must Firms Do?
Every authorised financial firm must follow formal complaint handling rules as set by the FCA’s Dispute Resolution (DISP) section of the Handbook.
A complaint is defined as any expression of dissatisfaction – oral or written – that suggests a customer has suffered or may suffer financial loss or inconvenience.
Key procedures include:
Quick resolution – If resolved within three working days, a simple written summary is sufficient.
Full investigation – For unresolved complaints, firms must provide a detailed final response within eight weeks.
Right to escalate – If not satisfied, the customer can contact the Financial Ombudsman Service (FOS).
Firms must retain complaint records for at least three years (and up to seven for specific business types such as MiFID-related services).
They must also carry out root cause analysis to identify patterns and improve service – and report complaint statistics to the FCA every six months.
Who Can Make a Complaint?
The FCA defines eligible complainants as:
Private individuals (including consumer buy-to-let landlords)
Small businesses (turnover under £6.5m and fewer than 50 staff)
Charities and trusts (within financial size limits)
Micro-enterprises (fewer than 10 people, turnover under €2m)
These groups are entitled to expect fair treatment and have access to the ombudsman if needed.
The Role of the Financial Ombudsman Service (FOS)
The FOS is the independent body that steps in when a consumer can’t resolve a complaint with a firm. It investigates disputes and makes legally binding decisions – but only on the firm. Consumers can still take their case to court if they reject the FOS outcome.
Since 2001, membership of the FOS has been compulsory for all firms regulated under the FSMA.
The service is funded by a general levy on firms, and by case fees for firms with multiple complaints per year. FOS decisions are made by adjudicators and ombudsmen after reviewing evidence from both sides.
Final Thoughts
Final Thoughts
Consumer protection is more than just a legal framework – it’s central to how trust is built between financial advisers and their clients.
As a CeMAP student, you’re expected to understand:
- The core elements of the Consumer Rights Act 2015
- The role of the FCA and other guidance bodies
- The complaints process and escalation routes
- Your duty to act with fairness, transparency and good faith
To reinforce your learning, use LIBF-approved materials and consider structured support with accredited providers such as CeMAP123.
Being clear on consumer protection now won’t just help you pass your exam – it will guide your ethical practice throughout your future career.