FSA to drive up standards of complaints handling
It 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.
- 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.
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 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.