New Financial Complaints Rules

New Financial Complaints Rules.

The finance industry regulator, the Financial Conduct Authority (FCA), has published new rules in how regulated financial companies are required to deal with your complaint.

These rules will take effect from 1 June 2016.

Less formal complaints

If you have a less formal complaint such as something trivial or issues that you raised by telephone they may be considered less formal complaints provided they are dealt with quickly and to your satisfaction. Currently, financial companies have just one day to deal with less formal complaints but from the above date they will now be given three days to deal with your complaint provided you, as the consumer, are satisfied with the outcome.

Formal complaints

No changes have been made to formal complaints in writing or other more serious complaints. If your financial company does not resolve your less formal complaint within one day (three days from June 2016) then your complaint will automatically be treated as any other official, formal complaint. As a general rule, financial services companies must adhere to the following procedures:

5 days

Five working business days to acknowledge your complaint in writing

8 weeks

Eight weeks to respond to your complaint in full, in writing, having completed a full investigation. At this stage, your complaint will either be upheld by the firm or not all may even be partly upheld depending upon the circumstances. At this time, the financial services company must also make you fully aware of the your Financial Ombudsman Service (FOS) rights. In simple terms, you do not have to accept the financial service company’s decision and can approach the FOS for an independent review of your complaint. Even then, any FOS decision whilst legally binding on the financial services company, it is not legally binding on you and you can take the matter further to the courts if you are still unhappy.

Financial companies complaints numbers to go public

Financial companies are required to report to the FCA the number of complaints that they receive each year. The FCA has indicated that it will make complaints numbers and information for each financial company more publicly available and indeed, understandable. The FCA has suggested that it will now ask financial companies to categorise complaints and supply complaints numbers in the following categories so that both they and you can make a more informed decision about whether to use the financial company or not.

New complaints categories:

• misleading advice/guidance
• arranging pension investment insurance mortgages et cetera
• inappropriate sales techniques
• unsuitable advice
• unclear guidance for arrangements

Our view is that the FCA is looking to improve standards from financial companies by making their complaints data more accessible and understandable for you, the consumer. In addition, rather than a big financial firm such as a bank simply supplying complaints data suggesting that they have had .  For xample:

10,000 complaints for that year, both the FCA and the consumer will be able to see whether the firm is reputable or not e.g. the if of those 10,000 complaints 7000 of them were for unsuitable advice, 2999 of them were for inappropriate sales techniques and just one was for arranging a pension, you may be able to conclude that the firm works efficiently when arranging any pension or investments but the standards of advice that the firm offers and the sales techniques that they use may not be that good.