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‘Troubling’ FCA complaints handling must improve, MPs say

  • 26/06/2020
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‘Troubling’ FCA complaints handling must improve, MPs say
The Treasury Select Committee (TSC) of MPs is putting pressure on the Financial Conduct Authority (FCA) to improve its complaints handling process after hearing many complainants are “suffering prolonged delays” and “poor communication”.


Committee chairman Mel Stride warned the regulator that it expects to see “real progress from the FCA” in its complaints handling and will raise the matter regularly in evidence sessions.

The group of MPs, led by Stride, got involved after the Complaints Commissioner published a damning report into the handling of one case which laid bare significant failings and slammed the “inadequately resourced” function.

Published in April, the review detailed a case which took two years to complete during which time the complainant was given at least seven case handlers.

Complaints commissioner Anthony Townsend also highlighted, among other issues, that he had “seen no evidence that the FCA has an effective system to prioritise complaints”.

Subsequently, Stride wrote to Townsend and FCA chairman Charles Randall asking for their views on the report and action being taken by the regulator to address the situation.


‘Not unique’ case

In his reply, Townsend noted the issue was a significant one which was not isolated to just one case and could have severe effects on the lives of those involved.

“While this particular case is at the worst end of a spectrum, it is not unique,” he said.

“Many complainants are currently suffering prolonged delays in the handling of their complaints, with inadequate communication.

“I need to emphasise that many of the complainants under the scheme are people who have suffered significant loss and are in considerable distress. They come to me often at their wits’ end because of the lack of progress.”

Townsend acknowledged the FCA had been candid about the problems it was facing and the new senior managers in charge of the function appeared to be genuinely determined to deal with the problem.

And he recognised there had been a major spike in complaints over the past 18 months.


Raised for several years

“However, I have been drawing the FCA’s attention for several years to the need to strengthen the complaints function, in order to provide the resilience which it requires,” Townsend continued.

“Its recent attempts to draft in additional staff have been only partially successful, with a turnover of investigators often leading to the problems illustrated in the case I have quoted.

“Unless the FCA can strengthen and stabilise the team, it will not be able to overcome its current difficulties.”

Townsend concluded: “The FCA is making genuine efforts to address the serious problems in its handling of complaints; but these problems are not new, and they have not yet been solved.”

He added that the FCA is required to give complainants timescales, ensure that complaints are dealt with by people with sufficient seniority, and resolved as swiftly as possible, with the aim of satisfying the complainant.

“These requirements are not currently being met.”


Only small sample

In reply, FCA chairman Charles Randall argued the majority of complainants received timely and adequate responses but agreed it was unacceptable that some had experienced significant delays in or received inadequate responses.

Randall added that the board had recognised the need for improvement and had begun enacting it including the change in management and increased resource.

But he argued that the Complaints Commission was limited to only witnessing a small number of complaints.

“We do not believe that the small sample of cases he sees enables general conclusions to be drawn about the overwhelming majority of complaints, which are determined by the FCA without reference to him,” Randall said.

He noted that the financial year 2019/20 saw an unexpected 70 per cent increase in the number of complaints for the regulator to deal with, which had led to increasing the complaints team by 40 per cent.


Performance improvement

Randall also said performance levels had seen a “significant improvement” with 734 complaints closed in 2019/20 compared to 718 in 2018/19

“Furthermore, the volume of complaints investigated and concluded by the commissioner is relatively low – 63 complaints in 2019/20,” he said.

“Despite the very significant increase in complaints concluded in 2019/20, it is reassuring to note that the proportion of our decisions that were fully upheld by the commissioner rose to 81 per cent, compared to 75 per cent for last year.”

And service levels had also improved by the end of the last year with 75 per cent of complaints meeting the eight-week target by the end of the year, compared to 60 per cent in the first half.

“I hope this summary of the measures already implemented, and those planned, assures you of the significant importance we attach to maintaining an efficient and effective complaints function within the FCA, and our commitment to addressing the issues we and the commissioner have identified,” Randall added.


‘Troubling’ missed requirements

Summing up the responses, TSC chairman Stride recognised the FCA was looking to tackle the problems but warned the committee would not let the regulator off the hook.

“While it is troubling that the commissioner has stated that these requirements are not currently being met in some of the cases that reach him, he has also noted that the FCA is making genuine attempts to address these complaints-handling problems,” he said.

“The commissioner, though, has stated that the FCA has not yet solved these problems. It is welcome, therefore, that the FCA has committed to addressing these issues.

“The Treasury Committee will expect to see real progress from the FCA in this area and will be seeking regular updates including in our evidence sessions with the FCA.”



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