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FSA Letter to all firms using waiver - dated 19th March 2009 - other info on this letter FSA do not intend an injunction against destruction of data post July 2001 - Legal Beagles
Originally posted by FSA letter 19th March 2009
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ANNEX - FINANCIAL DIFFICULTY
minimum standards for handling complaints where financial difficulty (FD) is claimed
I)firms to use their own records where available (eg. account activity and existing borrowing), to consider intially if the customer might be experiencing FD
only when this cannot be determined will it be appropriate for a firm to gather more information ie. issue an Income Expenditure form (''IE form'') 9FSA accepts that in a majority of cases it will be necessary to issue a Ie form in particular before considering/rejecting a claim of FD.
nb. firms are also refered to 14.4 and 14.5 of guidance to the banking code.
II)if an IE form is issued the firm to provide a reasonable period of time before issuing a closure letter to the customer which should clearly explain the reason why the firm has not accepted the customer is not in FD and that the firm will reopen the case should the customer subsequently return the IE form
III)where an IE form is returned it is to be reviewed by adequately trained and experienced staff to assess if the customermight be experiencing fd and the extent of the problem. staff should be able to interpret information to make an informed judgement which is clearly documented and in line with internal policy and guidance (including considering if a customer may have under declaared their outgoings) an appropriate course of action should be taken dependant on the extent of the problem IE. some customers may only require guidance on what to do, others may require more immediate action.
IV) any correspondance issued to the customer that provides detail of the decision taken by the firm must be compliant with disp requirements eg. it should clearly explain the outcome of the investigation and the rationale for the decision and provide details of how to investigate the complaint if the customer is not happy with how it has been resolved. (this included cases rejected because the customer did not return the ie form)
V) firms to provide a range of measures to support customers and to treat them positively and sympathetically
nb2)firms are also refered to sections 14.2 and 14.3 of the guidance to the banking code.
these might include: help and guidance about dealing with fd and avoiding charges; suspending collections and recovery activity; suspending accrual of further interest and charges; consideration of a refund of charges, in particular where the charges may have added to the FD during, or immediately before, the period of FD. The rationale for why a particular level of refund has been given should be documented and clearly explained to the complainant.
The minimum standards are not handbook guidance but rather update firms on the findings of good practise from our thematic review of the handing of unauthorised overdraft complaints.
The minimum standards do not purport to define the suitability standards for unathorised overdraft charge complaint handling. Firms should have regard to the minimum stndards in deciding what action they need to take to complay with the FSA handbook and the waiver. There may be serval ways of complying with the regulatory requirement and folowing guidance or other materials we publish such as the letter issued on 13th november 2008 is only one approach. for further information please refer to the section on fsa guidance and supporting materials in our enforcement guide paras 2.22 to 2.27 ( FSA Handbook - Full Handbook ) actually __> http://fsahandbook.info/FSA/extra/5149.pdf
A firms senior management remain responsible for establishing and implenmenting effective controls over unauthorised overdraft charge complaint handling..
ANNEX - FINANCIAL DIFFICULTY
minimum standards for handling complaints where financial difficulty (FD) is claimed
I)firms to use their own records where available (eg. account activity and existing borrowing), to consider intially if the customer might be experiencing FD
only when this cannot be determined will it be appropriate for a firm to gather more information ie. issue an Income Expenditure form (''IE form'') 9FSA accepts that in a majority of cases it will be necessary to issue a Ie form in particular before considering/rejecting a claim of FD.
nb. firms are also refered to 14.4 and 14.5 of guidance to the banking code.
II)if an IE form is issued the firm to provide a reasonable period of time before issuing a closure letter to the customer which should clearly explain the reason why the firm has not accepted the customer is not in FD and that the firm will reopen the case should the customer subsequently return the IE form
III)where an IE form is returned it is to be reviewed by adequately trained and experienced staff to assess if the customermight be experiencing fd and the extent of the problem. staff should be able to interpret information to make an informed judgement which is clearly documented and in line with internal policy and guidance (including considering if a customer may have under declaared their outgoings) an appropriate course of action should be taken dependant on the extent of the problem IE. some customers may only require guidance on what to do, others may require more immediate action.
IV) any correspondance issued to the customer that provides detail of the decision taken by the firm must be compliant with disp requirements eg. it should clearly explain the outcome of the investigation and the rationale for the decision and provide details of how to investigate the complaint if the customer is not happy with how it has been resolved. (this included cases rejected because the customer did not return the ie form)
V) firms to provide a range of measures to support customers and to treat them positively and sympathetically
nb2)firms are also refered to sections 14.2 and 14.3 of the guidance to the banking code.
these might include: help and guidance about dealing with fd and avoiding charges; suspending collections and recovery activity; suspending accrual of further interest and charges; consideration of a refund of charges, in particular where the charges may have added to the FD during, or immediately before, the period of FD. The rationale for why a particular level of refund has been given should be documented and clearly explained to the complainant.
The minimum standards are not handbook guidance but rather update firms on the findings of good practise from our thematic review of the handing of unauthorised overdraft complaints.
The minimum standards do not purport to define the suitability standards for unathorised overdraft charge complaint handling. Firms should have regard to the minimum stndards in deciding what action they need to take to complay with the FSA handbook and the waiver. There may be serval ways of complying with the regulatory requirement and folowing guidance or other materials we publish such as the letter issued on 13th november 2008 is only one approach. for further information please refer to the section on fsa guidance and supporting materials in our enforcement guide paras 2.22 to 2.27 ( FSA Handbook - Full Handbook ) actually __> http://fsahandbook.info/FSA/extra/5149.pdf
A firms senior management remain responsible for establishing and implenmenting effective controls over unauthorised overdraft charge complaint handling..
