FCA UPDATES COMPLAINT HANDLING AND REPORTING RULES

The FCA has announced changes to the rules covering the recording, reporting and publication of complaints.

The changes, which come into force during 2016, follow last year’s thematic review and market consultation on complaint handling in the financial services industry. The final changes were set out in a policy statement (PS15/19) issued in July.

Overview of the key changes being introduced:

• Tighter application of FCA complainant definitions, including assessment of whether the complainant has also suffered or may suffer financial loss, material distress or material inconvenience.
• All complaints that fit the FCA definition will become reportable, regardless of the time taken to resolve the complaint – currently, any complaint that can be resolved by close of business the next working day after it is received, is not reportable.
• Amendments to existing complaint reporting metrics as well as new ones for both informal and formal regulated complaints. These take effect from 1st January 2016.
• The number of complaint cause categories that need to be recorded will increase to eleven.  The new categories are: 
  – Advising, selling and arranging (unsuitable advice and/or unclear guidance or arrangements); 
  – Information, sums or charges or product performance (disputes over charges, performance of a product or its features or disclosure of product information);
  – General administration and customer service (e.g. errors, delays or timescale matters);
  – Arrears related: 
  – Claims related; and 
  – Other.
• An increase in the number of product groupings from five to 13 with one specifically for Legal Expenses Insurance.

The new rules also introduce a ‘Summary Response’ letter for complaints being managed as ‘Informal FCA Reportable’. The letter covers complaints resolved with the customer by the close of business, three business days after they are received. This letter will need to include a number of mandatory points covering the rights of referral to the Financial Ombudsman Service. 

Arc Legal continues to work with its partners and clients to ensure complaints procedures are customer-focused, robust and fully compliant. In response to the FCA changes, we are making the necessary changes to ensure we log all complaints, including those resolved by close of business the next working day, in our FCA submissions from 1st January 2016 and will respond to the changes in complaint handling timescales that take effect from 1st July.

If you would like to know more about our complaints processes and procedure then please contact your Account Manager.