The Financial Services Authority (FSA) has today proposed changes to its complaints handling rules as part of a package of measures to drive up standards of complaints handling within the industry.
Today’s consultation paper is key to the FSA’s consumer protection agenda and is aimed at ensuring that more firms resolve complaints promptly and fairly.
Proposals include:
- Requiring firms to identify a senior individual responsible for complaints
handling;
- Abolition of the ‘two-stage’ complaints handling rule to incentivise
firms to resolve complaints fairly the first time;
- Underlining the requirement for firms to carry out root cause analysis, by
identifying and remedying any recurrent or systemic problems with
complaints, and to take action where appropriate; and
- Additional guidance in relation to taking account of ombudsman decisions and previous customer complaints and learning from the outcome.
The FSA has also published firm-specific complaints data, enabling customers, for the first time, to compare and contrast the way different firms deal with their complaints.
The FSA is committed to greater transparency where it will benefit consumers. Publishing this data brings complaints to the attention of firms and consumers alike, and gives firms a benchmark and an incentive to improve how they treat their customers and handle complaints.
Sheila Nicoll, the FSA’s director of conduct policy, said:
“Good complaints handling standards should be the rule not the exception and complaints handling forms a key part of our intensive and intrusive approach to supervise how firms deal with their customers.
“While the FSA’s review into complaints handling by banks in April found some good practice, this is far from universal and it is clear that not enough is being done by senior management to prioritise complaints handling. Dealing fairly and effectively with customers who make a complaint provides a valuable opportunity for firms to rebuild and enhance their relationships with their customers.
“We will continue to work closely with firms to help push up standards in this area and to deliver improvements in the way firms treat their customers and we have already referred two firms to enforcement as a result of poor complaints practices.
“The firm specific complaints data published today is also a step in the right direction towards improving transparency for customers.”
The FSA today has also published its latest set of aggregate complaints statistics for the first half of 2010, which we began publishing in 2009, to enable customers to see the volume of complaints being received by firms.
The FSA also proposes to increase the limit on awards made by the Financial Ombudsman Service from £100, 000 to £150,000 to provide fairer and more effective redress for customers.