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1 Marketing, Financial Promotions & Contracts

Firms who are regulated by the FCA must implement controls, measures and procedures for adhering to the regulations relating to Distance Marketing, Financial Promotions, Pre-Contract Disclosure Information and Client Communication. As these 4 regulatory areas have numerous objectives and compliance expectations in common, we have created a combined audit checklist to help firms identify, assess, audit and meet their obligations.

2 About the Audit Checklist

If you need more space in the auditors’ notes sections, please use a separate piece of paper and attach it to the completed checklist. Using this checklist enables assessment of existing measures and procedures alongside the ability to identify and mitigate against any gaps or risk areas.

You are free to add or remove any questions or sections that apply/do not apply to your firm and you should aim to complete a full audit using this document on an annual basis, or more frequently for those with higher risks.  Once you have completed the audit, you should identify any gaps and put measures into place to mitigate against the associated risks. Completed audit checklists should be retained for at least 6 years and will form part of your compliance audit and monitoring program.

The next review date section should be when you next intend to carry out the next audit, unless you have identified a gap or non-compliance, in which case you should aim to re-audit as soon as mitigating actions have been applied.

2.1 Action Plan

We have included an action plan template at the end of the audit checklist that you can use where gaps or non-compliance areas have been identified. This action plan should be used to detail gaps and areas of non-compliance, then add corrective/mitigating actions, processes and dates and owners for implementing processes, systems or controls that will comply with the standards or requirements. Action plans and completed audits should be retained for 6 years and be made available to regulators and governing bodies upon request.

3 Marketing, Financial Promotions & Contracts Audit Checklist

AUDITOR:    ________________­­­­_________

DATE:            ________________­

 AUDIT TYPE:           ANNUAL/SPOT CHECK

AUTHORISED BY:   ________________­­­­_________
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
1. FINANCIAL PROMOTIONS & CLIENT COMMUNICATIONS
Does the document use plain and intelligible language?
Is the document easily legible?
Does the document specify the name of the person making the communication?
Does the document identify the lender? (credit broking only)
Does the document ensure that no implication is given that credit is available regardless of financial circumstance or status?
Is the firm’s full name and trading address provided?
Does the document include the statutory status disclosure status?
Is all the information contained in the document accurate?
Is the document fit for purpose and the intent clearly defined?
Are any risks or warning clear identifiable and legible?
If comparisons are used, are they fair, unbiased and honest?
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
If premium rate numbers are used, are the costs clearly provided?
Have all products/services been described accurately and in an honest manner?
Does the document specify the nature of the firm’s business?
Does the document provide contact numbers and/or an email address?
Does the document offer an opt-out button? (email promotions only)
Does the document comply with CONC 3.3 regulations?
2. PRE-CONTRACT DISCLOSURE & STAFF ADVICE
Was the customer provided with an adequate explanation of the features?
Was the customer advised to consider the information which is required to be disclosed under section 55 of the CCA?
Was the customer offered the chance to take away the information? (applies in person only)
Was the customer provided with an opportunity to ask questions?
Was the service/product offered, suitable for the customer and their needs?
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Was the customer advised of the price or the quoted costings involved in the agreement, including any costs, charges and fees?
Was the customer advised of the consequences of not honouring the agreement?
Was the customer advised of the consequences of not making agreed payments?
Was the customer offered the right to cancel the agreement and advised how to do so?
Was the customer provided with a written copy of the features, details and all costs involved in the agreement, prior to making any decisions or confirmations (applies where oral information has been given)?
Were reasonable attempts to assess the customers’ affordability and suitability status carried out?
Was the customer advised that entering into an agreement would be unsuitable to support sustained borrowing over long periods? (only applies to HCST credit)
In telephone communications, all agents make their identity and purpose known?
3. DISTANCE MARKETING
The reason for any distance marketing (telephone, mailshot, email etc), is clear, transparent and relevant?
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Any contractual obligations are adequately communicated to the customer?
Website and email content contain the company name, address, contact details and FCA disclosure statement?
Any T&C’s referred to in distance marketing are provided in writing to the customer in good time before the customer is bound by any agreement?
Any distance marketing information is provided within sufficient time for the customer to query and understand the content and always prior to any distance contract, agreement or offer being made?
Where distance marketing information has been provided via telephone, it is ensured that the agent has: –
  • Disclosed the information required by regulation 10 of the Consumer Credit (Disclosure of Information) Regulations 2010?
  • Provided a copy of the written agreement in accordance with section 61b of the Consumer Credit Act?
Full trading name, postal & email address, FCA disclosure statement and telephone number are provided on all written distance marketing materials? (premium rate numbers are disclosed & cost per minute provided)
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Where abbreviated distance marketing info has been provided to a customer via telephone communication, full distance marketing information is provided to them in writing in good time before they are bound by any distance contract?
Are alternate methods of communication offered to the customer where they request to change the existing communication means?
4. BUSINESS PROCESSES & COMPLIANCE
4a. Policies & Procedures
Do you have a Distance Marketing Policy & Procedures?
Do you have a Financial Promotions & Communication Policy & Procedures?
Do you have a Pre-Contract Disclosure Policy & Procedures?
Do you have a Post-Contract Policy & Procedures?
Do you have a Cancellation & Refund Policy & Procedures?
Do you have a Pre-Contract Disclosure Leaflet that meets the FCA and Consumer Credit (Disclosure of Information) Regulations 2010?
Is a copy of a completed Pre-Contract Disclosure Leaflet given to all customers prior to any agreement being made?
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Are all policies and procedures reviewed and (where applicable), updated on a bi-annual basis (or more frequently)?
Are Affordability Assessment forms/calculators used to assess the suitability of a product/service for each customer?
Are credit checks carried out to assess the financial status and creditworthiness of each customer?
Do you have Risk Management Policy & Procedures?
Are all staff given access to either the risk procedures or supporting information to help them identify risks and report issues?
Do you use a defined Risk Matrix, Risk Register and a Corrective Action Plan for identifying and assessing gaps areas of non-compliance?
4b. Training & Competency
Are regular training sessions completed by all staff in: –

  • Distance Marketing
  • Financial Promotions
  • Client Communication
  • Pre-Contract Disclosure Information
  • Customer Due Diligence
  • Post-Contract Requirements
  • Cancellation & Refunds
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Do you assess your staff’s knowledge & understanding using assessment tests?
Are support and guidance aids available for staff relating to CONC 2.7, 3 and 4? (screensavers, posters, scripts, screen prompts etc)
Are staff able to provide training feedback that can be submitted anonymously?
Are all new staff provided with induction training and access to the Employee Handbook or Company Compliance Manual/Compliance Regime?
Do staff understand the reporting lines to raise concerns and issues?
4c. Audits & Monitoring
Are all marketing, advertising and financial promotional material, systems and associated procedures audited at least annually for compliance?
Are staff calls and written correspondence monitored on a weekly basis through audit checklists?
Are staff given feedback on any audited accounts?
Are all audit logs retained for a minimum of 6 years?
4d. Record Keeping & Authorisation
Do you keep all marketing, promotional and advertising materials and records for a minimum of 6 years?
ASSESSMENT QUESTION YES NO AUDITORS NOTES NEXT REVIEW DATE
Do you have a Records Retention and Records Management Policy & Procedures?
Are marketing and promotional materials authorised by the Compliance Officer prior to being used?
Do all marketing, advertising and promotional materials and content comply with the FCA, Consumer Credit (Disclosure of Information) Regulations 2010 and Consumer Credit Act regulations?
Are records and logs clear, transparent and easy to understand and follow?

TO BE COMPLETED BY THE AUDITOR

Have all questions been completed?                           Print Name:  _______________________

YES/NO

Have all next review/action dates been set?                 Signed:  _______________________

YES/NO

3.1 Marketing, Financial Promotions & Contracts Corrective Action Plan

CORRECTIVE ACTION PLAN
CHECKLIST NO. SUMMARY CORRECTIVE ACTION OR MITIGATING CONTROL RESPONSIBLE PERSON STATUS DUE DATE COMPLETED (√)