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Complaints commissioner targets FCA register, firm supervision and transparency

  • 17/07/2020
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Complaints commissioner targets FCA register, firm supervision and transparency
The Complaints Commissioner has highlighted concerns with the Financial Conduct Authority’s (FCA) complaints scheme which shows it has been operating unsatisfactorily.


Complaints commissioner Antony Townsend raised three key areas of failings and three points in which the FCA needed to improve the performance of its complaints scheme.

Poor practices identified by Townsend included the FCA failing to adequately resource the complaints team to deal with the volume of complaints, and “clear examples of significant regulatory issues not being identified, despite complaints investigations”.

These broadly results in three themes: “significant weaknesses” in the accuracy of registers; the supervision of firms and a lack of reaction to significant information; and delays in regulatory processes and transparency about the extent of those failing.

Townsend recognised there had been a significant escalation of complaints in the last year and the FCA was acknowledging its failings and taking action, but that was not sufficient.


Repeated warnings

He proposed three significant changes:

  • Improving the complaints scheme to make it more readily understandable to complainants, and clarifying the policy on compensation under the scheme;
  • Giving the Complaints Commissioner (or another independent person) a wider role in periodic quality assurance of the operation of the regulators’ complaints functions;
  • Regular publication of the steps taken by the FCA to review the operation of its functions and to address concerns, including those arising from the complaints scheme – for example, the triaging of data received by the supervision hub, the maintenance of the register, and the effectiveness of supervisory responses to intelligence.

“Despite my repeated warnings over a sustained period – the FCA has not yet established a complaints function with the resilience required to deal with the kinds of problems which an organisation of its size and responsibilities requires,” Townsend said.

“Without these measures, I consider that there is a danger that the complaints scheme will continue not to meet its objectives, and that wider lessons about regulatory effectiveness will not be adequately addressed.”


Consultation on changes

As part of its response, the regulator has confirmed that it will be publishing a consultation on suggestions to improve the scheme and clarifying the compensation policy.

The FCA also noted that along with strengthening its our own quality control processes, it was “taking steps to enhance the general level of information about complaints and related management information we share with the commissioner”.

It added that it was already subject to significant public scrutiny and would continue to publish details through events such as its annual reporting cycle and the annual public meeting.

“A high percentage of complainants have received timely and adequate responses to their complaints,” it said.

“But it is unacceptable that some complainants have experienced significant delays in the handling of their complaints or received inadequate responses.

“During the course of this year, we have implemented comprehensive steps to eliminate the backlogs in complaints handling and improve performance. We are pleased that the commissioner is already seeing signs of improvement,” it added.


Under the microscope

The FCA’s complaints scheme has come under significant scrutiny during the last four months after the publication of a high-profile case which emphasised it was ‘inadequately resourced’.

A subsequent investigation by the Treasury Select Committee prompted a warning from chairman Mel Stride that it expects to see “real progress from the FCA” in its complaints handling.

The FCA received 2,198 complaints in the 2019-20 financial year with half of these deferred while other regulatory action was being undertaken, while a further 20 per cent were not investigated.

As a result, there were 734 complaints fully concluded by the regulator during the 12 months to the end of March.

The commissioner reviewed 275 complaints and enquiries in the course of the year, and made a decision on 63, of which 49 FCA decisions were fully upheld and 14 were not.

FCA service levels have also been falling over the last three years with just 68 per cent of cases closed within eight weeks – below target of 75 per cent.

This was down from 75 per cent in 2018-19 and 80 per cent in 2017-18.

The FCA said this was partly due to an increase in the volume of complaints received and partly due to their complexity, as complex complaints require more extensive investigation.



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