The FSO should have the power to direct redress for all customers affected

[Brendan Burgess]

The Central Bank Bill is being amended as follows, and the following gives the CB the right to order redress. I think it would be better to give this to the FSO.

From the original consultation paper

[FONT=&quot]Customer Redress[/FONT]
[FONT=&quot]A key element of customer protection is that regulated firms act with due skill, care and diligence and in the best interests of their customers. This requires that errors should be corrected quickly and complainants treated fairly. The power to allow the Bank to direct regulated firms to redress customers will be an efficient and effective means of ensuring that customers are compensated quickly and with minimum inconvenience. It would be used where the loss or damage as a result of an occurrence is widespread within a particular firm or widespread across a particular industry.[/FONT]

[FONT=&quot]42.—(1) Where the Bank is satisfied—[/FONT]

[FONT=&quot](a) that there have been widespread or regular relevant[/FONT] [FONT=&quot]defaults by a regulated financial service provider, and[/FONT]

[FONT=&quot](b) that, in consequence of the relevant defaults, customers of[/FONT] [FONT=&quot]the regulated financial service provider have suffered, are[/FONT] [FONT=&quot]suffering or will suffer loss or damage,[/FONT] [FONT=&quot]the Bank may give the regulated financial service provider a direction[/FONT] [FONT=&quot]requiring the making of appropriate redress to the customers.[/FONT]

[FONT=&quot](2) In subsection (1) “relevant default” means—[/FONT]
[FONT=&quot](a) charging a customer an amount which the regulated financial[/FONT] [FONT=&quot]service provider is not entitled to charge,[/FONT]
[FONT=&quot](b) providing a customer with a financial service which the[/FONT] [FONT=&quot]customer has not agreed to receive,[/FONT]
[FONT=&quot](c) providing a customer with a financial service which was[/FONT] [FONT=&quot]not suitable for the customer at the time when it was[/FONT] [FONT=&quot]provided,[/FONT]
[FONT=&quot](d) providing a customer with inaccurate information which[/FONT] [FONT=&quot]influences the customer in making a decision about any[/FONT] [FONT=&quot]financial service,[/FONT]
[FONT=&quot](e) a failure of any system or controls of the regulated financial[/FONT] [FONT=&quot]service provider, or[/FONT]
[FONT=&quot](f) a prescribed contravention.[/FONT]

[FONT=&quot](3) In subsection (1) “appropriate redress” means such monetary[/FONT] [FONT=&quot]or other redress as is specified in the direction and (in the case of[/FONT] [FONT=&quot]redress for pecuniary loss) as does not exceed the amount of the loss[/FONT] [FONT=&quot]suffered or anticipated to be suffered, together (where appropriate)[/FONT] [FONT=&quot]with interest at such rate as is so specified.[/FONT]

[FONT=&quot](4) A direction given under subsection (1) may require the costs[/FONT] [FONT=&quot]of the Bank in giving the direction to be met by the regulated financial[/FONT] [FONT=&quot]service provider to whom the direction is given.[/FONT]

[FONT=&quot](5) The fact that a regulated financial service provider has maderedress in compliance with a direction given under subsection (1)[/FONT] [FONT=&quot]shall not, of itself, constitute for any purpose an admission of liability[/FONT] [FONT=&quot]by the regulated financial service provider.[/FONT]

[FONT=&quot](6) A decision by the Bank to give a direction under subsection[/FONT] [FONT=&quot](1) is an appealable decision for the purposes of Part VIIA of the[/FONT] [FONT=&quot]Act of 1942.[/FONT]

[FONT=&quot](7) The provisions of a direction given under subsection (1) have[/FONT] [FONT=&quot]effect from the date specified in the direction in relation to them.[/FONT]

[FONT=&quot](8) A direction given under subsection (1) shall set out—[/FONT]
[FONT=&quot](a) all terms of the direction, including any specification of adate by which, or a period within which, any provision[/FONT] [FONT=&quot]made by it is to be complied with, and[/FONT]
[FONT=&quot](b) any incidental, consequential or supplemental provisions[/FONT] [FONT=&quot]for implementing the direction and securing that it is fully[/FONT] [FONT=&quot]and effectively carried out.[/FONT]

[FONT=&quot](9) The Bank may publish a direction given under subsection (1)[/FONT] [FONT=&quot]in any such manner as the Bank considers appropriate.[/FONT]

[FONT=&quot](10) Where the Bank is considering a complaint, or investigating[/FONT] [FONT=&quot]any other matter, for the purpose of deciding whether to give a direction[/FONT] [FONT=&quot]under subsection (1) it may publish notice that it is doing so in [/FONT][FONT=&quot]any such manner as the Bank considers appropriate.[/FONT]

[FONT=&quot](11) The duty imposed on the Bank by section 57BX(11) of the[/FONT] [FONT=&quot]Act of 1942 to refer a complaint to the Financial Services Ombudsman[/FONT] [FONT=&quot]does not apply in relation to a complaint if the Bank has dealt[/FONT] [FONT=&quot]with the complaint by giving a direction under subsection (1) or dur[/FONT][FONT=&quot]ing any period when the Bank is considering the complaint for the[/FONT]
[FONT=&quot]purpose of deciding whether to give such a direction.[/FONT]

[FONT=&quot](12) The duty imposed on the Financial Services Ombudsman to[/FONT] [FONT=&quot]investigate a complaint does not apply if the Bank has dealt with the[/FONT] [FONT=&quot]complaint by giving a direction under subsection (1) or during any [/FONT][FONT=&quot]period when the Bank is considering the complaint for the purpose[/FONT] [FONT=&quot]of deciding whether to give such a direction.[/FONT]


[FONT=&quot]43.—A failure by a regulated financial service provider to comply[/FONT] [FONT=&quot]with any obligation under financial services legislation is actionable[/FONT] [FONT=&quot]by any customer of the regulated financial service provider who suf[/FONT][FONT=&quot]fers loss or damage as a result of such failure.[/FONT]