RES exam question on Regulation & the CEA Framework: A salesperson is found to have made false statements to a client
Case study — A salesperson is found to have made false statements to a client. A complaint is referred to the CEA. The conduct is established. Evaluate the statements: (i) The CEA may take disciplinary action against the salesperson (ii) Penalties can include financial penalties or suspension (iii) Serious misconduct can lead to deregistration (iv) The CEA has no power to discipline salespersons Which statements are CORRECT?
- A(i), (ii) and (iv) only
- B(ii) and (iv) only
- C(i), (ii) and (iii) only
- D(i), (ii), (iii) and (iv)
Show answer & explanation
Answer
C. (i), (ii) and (iii) only
Explanation
(i) is correct: once misconduct is established, the CEA may take disciplinary action against the salesperson. (ii) is correct: penalties can include financial penalties or suspension. (iii) is correct: serious misconduct can lead to deregistration.
Why the other options are wrong
- (iv) is wrong: the CEA does have power to discipline salespersons; that disciplinary authority is central to its regulatory role.
Study the concept behind this question: Consumer Protection (Fair Trading) Act (CPFTA)
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