In a Dear CEO Letter, the FCA explains that it recently undertook a review of how consumer credit firms approach and deal with customer complaints.
FCA reviewed data, final response letters and website information on complaints from a range of consumer credit firms. FCA found examples of good practice to the benefit of consumers but also found material non-compliance and other concerning practices.
FCA’s Dispute Resolution (DISP) rules apply to all sizes of firms, and are not new to the consumer credit sector. Most firms engaged in regulated consumer credit activities have been subject to the DISP rules since the Consumer Credit Act 2006 came into force on 7 April 2007.
FCA found examples of non-compliance with the requirements set out in DISP as well as general poor practice relating to the way firms handle complaints.
The main concerns FCA identified were:
- a failure to provide to customers the required information about the Financial Ombudsman Service – this included failing to provide details of the complainant’s right to refer to the ombudsman if they remain dissatisfied
- a failure to provide a clear explanation, to the complainant, of the outcome of the complaint and why this outcome had been reached
- a lack of management controls in place to analyse and remedy any root causes of complaints or systemic problems
You can find information on the specific requirements by reading the letter by following the link above.
What might it mean for you?
FCA expects consumer credit firms to review how those firms identify, record, and deal with complaints as well as how this is communicated to customers, particularly taking into consideration the above areas. FCA reminds firms that every firm must be able to evidence its compliance with the applicable regulatory requirements.
Firms do not need to notify FCA of its review or the outcome of its review.