Complaints Commissioner criticises FCA’s response to MLRs complaint

The Complaints Commissioner has criticised the FCA for refusing to review a complaint made about its legal obligations under the MLRs.

The complainant had written to the FCA asserting that the regulator had been grossly negligent by not fulfilling its obligations under MLRs, specifically Regulations 17 and 46, in not mandating banks to inform customers of the money laundering risks of receiving payment from a third party into their bank account.

The FCA determined it would not investigate the complaint on the basis that the complaint constituted dissatisfaction with its general regulatory decision-making and therefore was not within the remit of the Complaints Scheme.

The Complaints Commissioner held that the complaint was not general in nature but instead was specific and should have been investigated by the FCA. In a previous response, the FCA acknowledged it should not have excluded the complaint on the basis that it was general dissatisfaction, but maintained it should be refused because complaints about rule making are excluded from the Complaint Scheme.

The Complaints Commissioner also criticised the FCA for not responding to the complainant’s suggestion that the FCA should require banks to make this messaging explicit because customers are unaware that accepting third party payments into their accounts is problematic.

In response, the FCA has accepted the Commissioner’s recommendations and has agreed to apologise to the complainant and make an ex gratia payment to them of £250. It further stated that, though it takes reducing and preventing financial crime incredibly seriously, the explicit requirement suggested by the complainant was not the intention of Regulations 17 and 46. It suggested that the introduction of the Consumer Duty will mean firms are thinking about how best to operate in the interests of their customers and meet financial crime obligations.

Harry Wells