The FCA has published a Dear CEO letter that it has sent to consumer credit firms regarding the handling of complaints.
Key points in the Dear CEO letter include:
- resolving complaints effectively is an important way for firms to identify and correct mistakes in the treatment of customers, and an important means to identify and address common or systemic issues that give rise to complaints;
- firms’ attitudes to complaints are a strong indicator of their culture and whether they have customers at the heart of their business; and
- the FCA’s Dispute Resolution (DISP) rules apply to all sizes of firms, and are not new to the consumer credit sector. Most firms engaged in regulated consumer credit activities have been subject to the DISP rules since the Consumer Credit Act 2006 came into force on 7 April 2007.
The FCA explains in the Dear CEO letter that it recently conducted a review of how consumer credit firms approach and deal with customer complaints. While finding examples of good practice it also found material non-compliance and other concerning practices.
The main concerns that the FCA identified were:
- a failure to provide to customers the required information about the Financial Ombudsman Service – this included failing to provide details of the complainant’s right to refer to the ombudsman if they remain dissatisfied;
- a failure to provide a clear explanation, to the complainant, of the outcome of the complaint and why this outcome had been reached; and
- a lack of management controls in place to analyse and remedy any root causes of complaints or systemic problems.
The FCA explains each of the above concerns in further detail in the Dear CEO letter.
The FCA states that it expects consumer credit firms to review how they identify, record and deal with complaints as well as how this is communicated to customers. Firms are also reminded that they must be able to evidence their compliance with the applicable regulatory requirements.
View Dear CEO letter consumer credit firms handling of complaints, 13 September 2017