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What’s happening?

The FCA has recently issued a statement clarifying its position on firms’ complaints handling in the current circumstances. It intends to review and update this statement in three months’ time.

The FCA’s overall view is that firms should take all reasonable steps to ensure that as much complaint handling as possible continues through staff working from home, where this can be done fairly and effectively. It expects firms to prioritise:

• paying promptly complainants who have been offered redress and accepted that offer,
• the prompt and fair resolution of complaints from:
• consumers who are likely to be vulnerable to harm if their complaint is not resolved promptly and fairly, and
• micro-enterprises and small businesses that are likely to face serious financial difficulties if their complaint is not resolved promptly and fairly, and
• sending timely holding responses to those complainants where their complaints cannot be resolved promptly.

If a firm cannot deliver these three priorities adequately and effectively through home working, then the FCA considers that it could be appropriate for it to maintain the minimal on-site presence needed to do so.

What do you need to do?

Focus on vulnerable consumers

Firms should be aware that coronavirus and the associated public health measures are likely to exacerbate the personal circumstances that can cause vulnerability. They may also cause many consumers who would not normally think of themselves as vulnerable to suddenly face personal circumstances that can cause vulnerability. Coronavirus could exacerbate, or suddenly cause vulnerability in many ways. These may include loss of income from losing employment or being furloughed, the impact of isolation on mental and physical health, and people’s ability to work and care for others.

Firms should be aware that micro-enterprises and small businesses can also face circumstances that can make them especially susceptible to harm if a firm’s failure to act with appropriate levels of care means that a complaint is not resolved promptly and fairly.

Maintain the quality of complaint handling

While firms may be dealing with fewer complaints each week and so taking longer than usual to answer some complaints, the FCA does not expect any reduction in the quality of firms’ complaint handling. Firms should ensure they continue to meet the relevant obligations, including investigating complaints competently, diligently and impartially, and paying appropriate redress or making other appropriate remediation.

If firms experience difficulties

The FCA recognises that operational challenges mean that some firms may find it more difficult to meet certain requirements and in particular, the requirement to provide a final response to complaints within eight weeks of receipt (within fifteen business days for payment services or e-money complaints), or a holding response explaining why they have been unable to provide a final response within the timeframe.

Any firm that has material difficulties complying with complaint handling requirements should inform its usual supervisory contact or contact firm.queries@fca.org.uk and outline the steps it is taking to manage and address its non-compliance.

Claims management companies and referrals to the Financial Ombudsman Service

The FCA expects claims management companies to allow firms a reasonable amount of extra time, beyond eight weeks, to give a final response before referring complaints to the Ombudsman Service. (This period is fifteen business days for payment services or e-money complaints, rising to thirty-five business days where the firm has sent a holding response within fifteen business days of receiving the complaint.)

Understand the Ombudsman Service’s general approach

The Ombudsman Service determines complaints by reference to what is, in its opinion, fair and reasonable in all the circumstances of the case. The challenges faced by firms during this period, and what counted as good industry practises at the time, will form part of that assessment.

How can we help you?

If you’d like to know more about complaints handling, dealing with the Financial Ombudsman Service, or any other aspect of FCA compliance, our expert team is here to help. Contact us today on 0207 436 0630 – or email info@thistleinitiatives.co.uk.