Medium-sized firms fall short on PPI complaints
The review of high street banks, building societies, credit card providers and personal loan companies found that while some were handling complaints about payment protection insurance in line with its expectations others had significant issues that needed to be put right.
Clive Adamson, director of supervision at the FCA, said: “We expect firms to deliver fair outcomes to PPI complainants. In our review we found that some firms are doing this while it is clear others still have some way to go.
“I am encouraged that the firms in the scope of our review have taken immediate steps to put in place the necessary remedial measures and I expect them to ensure they have robust processes in place to work through the remaining complaints so that eligible complainants can be paid out as quickly as possible.”
One medium sized firm has already been referred to the enforcement team as a result of the FCA’s action and it is considering whether a number of others should also face further action.
The FCA is working closely with firms to help improve their complaint handling processes to a level that consumers would expect and to remediate any detriment that may have occurred.
In July redress paid out for PPI came to almost £528m up from £498m in June and marked the first time in 2013 that over £500m has been paid out in any one month.
In its review each firm was asked to provide a sample of 50 PPI complaints, 40 rejected complaints and 10 upheld.
These were measured against whether handlers had assessed the merits of individual complaints in line with FCA rules, whether the offers of redress were fair and how clearly the decisions were explained.
Six of the firms involved were generally delivering fair outcomes on PPI complaints. Of the reject decisions by these firms the FCA disagreed with less than 8% and of those upheld it had concerns with redress offers in 21% of cases.
The FCA believed firms should try to establish the bigger picture and try to clarify the nature of the complaint.
Firms should look at the information available at the time to the customer, their personal circumstances and the manner in which sales were being made at the time.
Six firms achieved these aims although there was some scope to improve the clarity and quality of some responses to complainants.
Of the remaining 12 firms the FCA disagreed with six out of ten of their rejected cases and had concerns with the redress offered in over two fifths, 43%, of their upheld decisions.
The FCA has also been assessing the complaints handling of larger firms including high street banks and credit card companies with the results to be published at a later date.