Complaints Commissioner criticises FCA over status disclosure complaint

The Complaints Commissioner has published its final report relating to a complaint about how the FCA handled an issue relating to status disclosure. The complainant contacted the FCA to complain about a lack of clarity over whether a firm (X, trading under brand name Y) was FCA-authorised to accept tenant deposits and pay interest. The complainant said the status disclosure did not make it clear what activities the firm was authorised to do.

The FCA originally treated the complaint as a query and merely advised that the firm would have to comply with its rules and guidance, but did also clarify that accepting tenant deposits is not a regulated activity and so FCA rules do not apply to it. When the complainant was not satisfied with this response, the FCA treated the correspondence as a complaint and rejected it on the basis that the activity is not regulated.

The complainant took the case to the Complaints Commissioner, saying that the FCA had not answered the question on whether the firm was complying with status disclosure requirements and also that it had taken too long to respond.

The Complaints Commissioner noted that the FCA had explained which activities the firm was authorised for and why it did not need to be authorised for accepting tenant deposits, but noted that the response had not addressed the fact that the status disclosure gave the impression that the firm was authorised for the business detailed in its correspondence with the complainant (ie accepting tenant deposits).

The Commissioner recommended that the FCA pass the question to its supervision department for it to assess whether firm X had complied with its rules. The Commissioner also said that the case may be within FOS’ remit even though the complainant had been told it was not.

On the complaint about the length of time the FCA took to process the complaint, the Commissioner noted that the Complaints Scheme rules require a response within 8 weeks unless a complaint is complex, so that taking over 2 months, as the FCA did, was excessive. This element of the complaint was upheld, although the Commissioner said the FCA’s apologies for the delay were appropriate and sufficient in the circumstances.

The FCA said it has passed the information to its supervision team.