Supervision work undertaken by the FCA in recent months has revealed that some GI firms are failing to consistently deliver fair outcomes for their customers when handling complaints. 

The FCA’s definition of a complaint is:

“A complaint is any oral or written expression of dissatisfaction, (whether justified or not) from, or on behalf of, a person about the provision of (or failure to provide) a financial service or a redress determination, which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.”

You should also note that, even if the business was written prior to the date when FCA regulation started, it is normally still eligible to be treated under the FCA rules if the complaint occurs after that date.

The FCA has identified a number of areas requiring improvement, including:

• Identifying and dealing with complaints as required
  Firms must apply the FCA definition of a complaint correctly. Some firms are dealing with complaints in breach of DISP requirements, without issuing a summary resolution or a final response letter. This may prevent customers from accessing the formal complaint process – for example, the complaints time-limit rules, fair and prompt assessment of the complaint, and Ombudsman referral rights. And the complaint returns provided to the FCA will not be accurate.
• Dealing with complaints comprehensively
  Firms should be capturing and addressing all elements of each complaint.
• Investigation of complaints
  Complaints must be investigated competently, diligently and impartially.
• Final response letters
  Some firms need to improve the quality of final response letters issued to customers.
• Identifying the root cause and appropriate remedial action
  Ensure the root causes of complaints are always captured. The action required to correct the root cause, action owners and dates for completion must be clear.
• Outsourced complaints handling
  Firms that outsource complaints should take steps to ensure that their complaints processes are embedded by their outsourcers. They should have effective oversight of the quality of their outsourcers’ complaint handling, and management information to support this.

The FCA intends to continue to monitor firms’ compliance with the regulations as part of its ongoing supervisory work, and they have confirmed they will take action with individual firms where necessary.