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FCA delays mortgage switching consultation; updates on complaint handling

  • 18/03/2020
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FCA delays mortgage switching consultation; updates on complaint handling
The Financial Conduct Authority (FCA) has delayed the publication of its mortgage switching consultation paper came as part of its response to the Covid-19 outbreak.


Papers on business continuity and operational resilience, consumer vulnerability, and general insurance pricing are also among 16 consultations and publications delayed so far.

The regulator praised the mortgage industry’s response to the coronavirus, but warned all firms to maintain strong customer support and manage their financial resilience and liquidity.


Encouraged by mortgage lenders

The mortgage switching consultation was announced last week as the regulator published research into the mortgage loyalty penalty that borrowers face for remaining with the same lender.

This research found brokers did a better job of ensuring borrowers did not fall onto lender standard variable rates (SVRs) and that they remortgaged either internally or externally, potentially saving thousands of pounds per year.

It also praised mortgage lenders for their response to the situation, noting that mortgages represent many consumers’ major financial commitment.

“We have been encouraged by the actions of some lenders in granting flexibility on mortgage payments as a way of protecting consumers,” it said.

“We will be discussing with the industry and updating approaches mortgage providers may take to assisting their customers in the coming days.”


Complaints handling

The FCA reminded firms that its rules allowed flexibility, bearing in mind customers’ individual circumstances, and that it welcomed firms taking initiatives beyond usual business practices to support customers, although they should contact the FCA when doing so.

It added that it still expected firms to deal with complaints promptly.

“However, where the pandemic prevents this firms should contact us; we understand the pressures firms will be under,” it continued.

“Firms are reminded that they should aim to resolve any complaint within eight weeks (15 days for payments firms). If they cannot, they should write to the customer explaining why they have not met the deadline.”


Business continuity

Overall, the regulator said it appreciated firms reviewing their current arrangements to address the evolving coronavirus situation while managing risks to employees, customers and market impact.

But it emphasised firms should be taking reasonable steps to ensure they were prepared to meet likely challenges to customers and staff, particularly through their business continuity plans.

“We expect firms to provide strong support and service to customers during this period,” it said.

“They should be clear and transparent and provide support as consumers and small businesses face challenges at this time.

“We also expect firms to manage their financial resilience and actively manage their liquidity. Firms should report to us immediately if they believe they will be in difficulty,” it added.


The full list of publications and consultations affected so far


Extended response closure dates until 1 October 2020:

CP20/4: Quarterly Consultation No 27

CP19/32: Building operational resilience: Impact tolerances for important business services

CP20/1: Introducing a Single Easy Access Rate for cash savings

CP20/3: Proposals to enhance climate-related disclosures by listed issuers and clarification of existing disclosure obligations

CP20/5: Consultation paper on ETF Listing: Premium to Standard Listing

Open Finance

Accessing and using wholesale data


Delays to publications and other activity due before the end of June – no new date yet given:

Joint PRA FCA work to develop industry led guidance on how to integrate climate related risks into business decision making across the FS sector.

Motor Finance PS.

Consultation Paper on mortgage switching.

Vulnerability Guidance.

Vulnerability Research.

Options to change our regulatory framework following our Duty of Care Feedback Statement.

Consumer Credit Act (CCA) review.

Credit Information Market Study – Interim Report.

GI Pricing Final report and Consultation Paper on remedies.



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