In its May 2015 Data Bulletin, the financial regulator, the Financial Conduct Authority (FCA), reveals what are the most common reasons why consumers make contact with them.
The top five reasons in March 2015 were:
• What the FCA classes as a ‘non-product enquiry’, i.e. enquiries concerning areas it does not regulate. Examples cited include buy to let mortgages and mobile phone debt collection
• Consumer credit, especially regarding personal loans
• Investment products
• General insurance
• Possible scams
The bulletin also contained three examples of customer contacts:
• An equity release customer who was told by a firm that they could only conduct business with him on a face-to-face basis, on the grounds that they believed this to be an FCA rule. Following the regulator’s guidance, the customer contacted the firm again, who then apologised for their error. Any decision on the advice methods a firm uses is generally a commercial, rather than a regulatory, decision
• A customer who had been cold called about a pension review. The firm also sent a courier to her home, who initially refused to leave. When the customer gave the name of the firm to the FCA, they could not find any record of having authorised the firm, and so advised her to proceed with caution. This contact resulted in a referral to the Enforcement Division. Customers and authorised firms are warned to be especially wary of pension scams since the recent introduction of new pension freedoms.
• A customer who took out a loan, but on receiving the paperwork found that the interest rate was higher than she had been led to believe. The firm had failed to return her calls asking for clarification. The FCA advised the customer of the process to be followed for making a complaint, and also passed details of the case to their consumer credit team.
Generally speaking, the FCA might deal with a customer query in a number of ways:
• Give the customer general information
• Refer the customer to relevant areas of the FCA website
• Advise the customer to contact their firm, either to seek information from them, or to raise a complaint
• Advise the customer to contact another organisation that can help with financial issues, such as the Financial Ombudsman Service or Money Advice Service
• Pass details of the customer contact to the Supervisory and/or Enforcement division within the FCA
Usually, issues that result in enforcement action come to light during FCA supervisory visits to a firm. But the last of the examples in the above list shows that it is also possible for issues about a firm’s conduct to be highlighted via things their customers tell the FCA. Two of the three case studies in the bulletin involved details of the customer’s experiences being passed to another division within the FCA. Essentially, firms should note that it is irrelevant how wrongdoing was uncovered, and that if the FCA is satisfied they have broken the rules, enforcement action could follow.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.