FSA to ditch 2 tier complaints

[Amethyst]

30 September

Consultation Paper
Consumer complaints: The ombudsman award limit and changes to complaints-handling rules
The Financial Services Authority invites comments on this Consultation Paper. Comments should reach us by 31 December 2010.

The Financial Services Authority (FSA) proposes to abolish the two-stage complaint handling process that is used by financial companies because of widespread abuses. The financial services industry received 4.1 million formal complaints from customers in 2009, yet only a relatively small number of complainants pursued their cases when they were first turned down. The FSA believes that customers give up on their complaints after receiving letters, which are usually issued automatically without any proper inquiry. The FSA said that from July 2012 companies should issue only one response to complaints

[Amethyst]

Re: FSA to ditch 2 tier complaints

Interesting...

3.18 However, we do recognise that there are some specific issues about claims management
companies, which is why the FSA, the ombudsman service and the Ministry of Justice
will shortly publish a joint statement setting out our expectations.

[EXC]

Re: FSA to ditch 2 tier complaints

Nice one Ame it's interesting stuff.

We must remember to FoI them for the banks' responses.

The Dear CEO letter of 2007, despite threatening action, obviously had no effect and clearly wasn't followed up by the FSA.


3.7 But the arrangements have also been subject to misuse. July 2007’s ‘Dear CEO’
letter on handling complaints about unauthorised overdraft charges noted that
some firms’ practices were ‘so protracted, incremental and iterative’ that they did
not comply with ‘the requirement to have in place and operate appropriate and
effective complaints handling procedures or to take reasonable steps to ensure that
they handle complaints fairly, consistently and promptly.’23 We also changed the
rules, which came into effect in July 2008, to clarify that information about the
ultimate availability of the ombudsman service should be ‘set out prominently
within the text’ of the responses at the end of stage one, because we were concerned
that some firms ‘merely referred to the FOS [the ombudsman service] among much
other detail in standard complaints leaflets enclosed alongside their responses, rather
than on the face of the responses themselves.

3.8 However, the banks complaints handling review found that three out of five banks used
the two-stage process in ways that could result in the unfair treatment of complainants.