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Consumer Protection and Regulatory Compliance Flashcards

7 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Consumer Protection and Regulatory Compliance flashcards as text

  1. What is the primary purpose of Anti-Money Laundering (AML) checks in the mortgage application process?

    Answer: To identify and prevent criminal proceeds being used to purchase property

    AML checks are a legal requirement under the Proceeds of Crime Act 2002 and Money Laundering Regulations to prevent criminals from using property purchases to legitimise illegal funds.

  2. What does 'Know Your Customer' (KYC) primarily require in the mortgage advice context?

    Answer: Verifying the customer's identity and assessing the source of their funds

    KYC procedures require firms to verify customer identity through documentary evidence and assess the risk of money laundering, including scrutinising the source of deposit funds.

  3. To which body must a mortgage adviser submit a Suspicious Activity Report (SAR) if they suspect money laundering?

    Answer: The National Crime Agency

    SARs must be submitted to the National Crime Agency (NCA) via its online portal when a mortgage adviser suspects money laundering or terrorist financing activity.

  4. Which GDPR principle requires that personal data collected during a mortgage application should not be retained longer than necessary?

    Answer: Storage limitation

    The storage limitation principle under GDPR requires that personal data be kept in identifiable form only for as long as necessary for the stated purpose of collection.

  5. What is the role of the Information Commissioner's Office (ICO) in relation to mortgage firms?

    Answer: To oversee data protection compliance and handle data breach notifications

    The ICO is the UK's independent data protection authority, overseeing compliance with GDPR and the Data Protection Act 2018 for all organisations including mortgage firms.

  6. What is the criminal offence of 'tipping off' in the context of Anti-Money Laundering regulations?

    Answer: Disclosing to a suspect that a SAR has been filed, which could prejudice an investigation

    Tipping off is a criminal offence under the Proceeds of Crime Act 2002, committed when someone discloses to a money laundering suspect that a SAR has been or may be submitted.

  7. When is 'enhanced due diligence' (EDD) required in the mortgage application process?

    Answer: When the customer or transaction presents a higher risk of money laundering

    EDD involves additional verification and monitoring applied to higher-risk customers or transactions, such as Politically Exposed Persons (PEPs), complex ownership structures, or unusual fund sources.