CIPR 3.7.1 Handling of errors
(1) An authorised firm must have procedures, recorded in a durable medium, for effectively handling errors that affect customers. The procedures must provide for at least the following:
(a) identifying the cause of an error;
(b) identifying all of the affected customers;
(c) appropriately analysing the patterns of occurrence of the error, including investigating whether or not it was an isolated error;
(d) proper control of the correction process;
(e) the escalation of errors to the firm's compliance officer, the firm's risk management officer (if any), and to its senior management.
(2) An authorised firm must resolve every error speedily and no later than 6 calendar months after the date on which the error was first discovered. The resolution of an error must include:
(a) if appropriate, making a refund (with appropriate interest) to all the affected customers, so far as possible;
(b) correcting any systems failures;
(c) ensuring that effective controls are implemented to prevent the error recurring; and
(d) notifying all affected customers, both current and former, in a timely manner, of any error that has negatively affected or may negatively affect the cost of the service, or the value of the product, provided.
(3) If an error that affects customers has not been fully resolved within 40 business days after the date on which it was first discovered, the firm must inform the Regulatory Authority in a durable medium within 5 business days after the end of the 40-business-day period.
(4) An authorised firm must maintain a record of every error that affects customers. The record must contain, for each such error:
(a) details of the error;
(b) the date on which it was discovered;
(c) an explanation of how it was discovered;
(d) the period over which it occurred;
(e) the number of customers affected;
(f) the amount of money involved;
(g) whether the error has been resolved or not;
(h) the date on which the error was resolved;
(i) the number of customers to whom a refund was paid; and
(j) the total amount refunded.
(5) An authorised firm must maintain a record of all of the steps taken to resolve an error that affects 1 or more customers. The record must include details of the steps taken:
(a) where any affected customer was dissatisfied with the outcome;
(b) where there were difficulties contacting affected customers; and
(c) where a refund could not be paid.
|Derived from QFCRA RM/2019-2 (as from 1st January 2020).|