31Jul

On July 23 2015, the Financial Conduct Authority (FCA) announced further changes that will be made to its complaints rules as a result of the European Union’s Alternative Dispute Resolution Directive.

Firms will be given until the end of the third business day after receipt to try and resolve complaints informally. At present, firms must invoke their formal complaints procedures if the matter cannot be resolved to the customer’s satisfaction by the end of the business day following receipt.

Firms will however need to send a letter to the customer summarising the actions they have taken in resolving the complaint informally, and will now need to make the customer aware of their right to refer complaints to the Financial Ombudsman Service. At present, informally resolved complaints do not need a final response letter or similar, and the customer does not need to be informed of the FOS.

Firms will need to provide more information on their six-monthly complaints returns under the new rules. This will include the need to report numbers of informally resolved complaints.

Customers who telephone to complain must not be asked to call on a premium rate phone number. This restriction will also apply to all customer service calls which are made post-contract.

These rules have been finalised, but will not come into force until June 30 2016, with the exception of the restrictions on premium rate phone numbers, which take effect from October 26 2015.

The first tranche of new rules under the Directive are already in force. Final response letters must continue to explain why a complaint is being accepted or rejected, and detail what redress (if any) is to be provided. The letter must now give the website address of the FOS, as well as making the customer aware of their right to refer the matter to the FOS. The need to enclose the FOS leaflet with the final response remains.

Firms also now need to decide whether they will consent to the FOS considering time barred complaints about their firm and/or complaints which are referred to the FOS more than six months after the date of the final response. Specified wording now needs to be included in the final response letter regarding the decisions the firm has taken regarding these issues. There is no scope to vary this wording, which can be found in DISP 1 Annex 3 of the Financial Conduct Authority’s Dispute Resolution (DISP) sourcebook.

Firms also need to amend their websites so that they contain a link to the FOS website, and give an explanation of the FOS’s services.

Christopher Woolard, director of strategy and competition at the FCA, said:

“Our rules will help deliver the quicker, easier and fairer resolution to complaints that consumers want. Getting this right is also vital for firms. A properly resolved complaint can keep a customer happy, and protect the firm’s reputation. But, more than that, effective complaints handling systems can act as an early warning system for firms.”

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.