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Module 1 · FSRE (Financial Services, Regulation & Ethics)

FRE1Industry, Regulation and Key Parties✓FRE2Skills, Principles and Ethical Behaviours

Module 2 · MORT (Mortgages)

MRT1Mortgage Law, Practice and Application MRT2Mortgage Products and Post Completion

Module 3 · Synoptic case-study exam

ASEW/ASSCAssessment of Mortgage Advice Knowledge (synoptic)

CeMAP FRE1 The FCA, PRA & the FCA Handbook question: use to get money back to the borrowers

CeMAP FRE1The FCA, PRA & the FCA Handbook

The FCA finds that a lender has overcharged thousands of borrowers in arrears. Apart from a fine, which power can it use to get money back to the borrowers?

A It can order the FSCS to pay the borrowers from the industry levy at once
B It can transfer the borrowers' mortgages to another lender of its choosing
C It can award each borrower compensation through the Upper Tribunal
D It can require restitution or set up a consumer redress scheme

Show the answer and explanation

Answer: D. It can require restitution or set up a consumer redress scheme

The FCA can require a firm to pay restitution to those who have suffered loss (FSMA 2000 s384) or apply to court for a restitution order (s382), and it can impose a consumer redress scheme where there has been widespread failure (s404). Fines go to HM Treasury, not to customers. The FSCS pays only when a firm cannot pay; it is not used against solvent firms. The FCA cannot transfer customers' mortgages.

Common mistake

Assuming fines are paid to the customers who lost out.

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Study note: The FCA, PRA & the FCA Handbook CeMAP FRE1practice questions & mock exams

Related CeMAP FRE1 questions

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Original practice material mapped to the published CeMAP FRE1 learning outcomes. Independent, not endorsed by Walbrook (formerly LIBF). Verify figures and rules against current guidance before relying on them.