The Financial Conduct Authority says “firms have now had enough time to embed new ways of working” and that only in exceptional circumstances should the coronavirus pandemic be used an excuse for failing to conclude an investigation into a customer complaint within the usual eight-week period.

The FCA updated its complaints guidance for firms on July 31. Back on May 1, when you could have said Covid-19 was at its peak, the regulator recognised that the pandemic could have posed a number of operational challenges for firms and that the length of time it took to resolve customer complaints could have been affected by these challenges. Now, the FCA has toughened its stance, and expects firms to conclude complaints investigations within eight weeks in all but “exceptional circumstances”.

The FCA’s update reads:

“When we first published this statement on 1 May 2020, we recognised that operational challenges could result in some firms finding it more difficult to meet certain requirements in DISP 1.6. In particular, the requirement to provide a final response to complaints within 8 weeks of receipt (15 business days rather than 8 weeks for payment services or e-money complaints), or a holding response explaining why they’ve been unable to provide a final response within the timeframe.

“We consider that firms have now had enough time to embed new ways of working, and, accordingly, a failure to comply with DISP 1.6, or other complaint handling requirements, should only arise in exceptional circumstances connected to the impact of Covid-19.”

Any firm that is still experiencing difficulty meeting the eight-week deadline in some cases is expected to inform the FCA – via their usual supervisory contact if they have one, or via an email to the Firm Queries email address if they do not. When making contact, the firm should inform the FCA of the steps it is taking to address the problem.

Where a firm’s complaint handling capacity remains stretched as a result of coronavirus, the FCA expects them to give priority to:

  • The payment of redress from upheld complaints, whether these are cases upheld by the firm or by the Financial Ombudsman Service
  • Complaints from vulnerable customers
  • Complaints from micro-enterprises and small businesses who are likely to face serious financial difficulties if their complaint is not resolved promptly and fairly

The FCA has identified four key drivers which may increase the risk of vulnerability. These are:

  • Poor health, mental or physical health
  • Low levels of financial or emotional resilience
  • Experiencing adverse life events such as bereavement or divorce
  • Low capability – this is a very wide-ranging definition that could encompass poor communication skills (including a limited ability to communicate and transact online), limited language or cognitive skills, or low financial capability

The pandemic could itself have exacerbated vulnerability in certain individuals, or even caused new vulnerabilities, for example:

  • Loss of income from losing employment or being furloughed
  • The impact of isolation on mental and physical health and people’s ability to work and care for others
  • Particularly in the case of some key workers, the impact of extremely demanding working conditions and greater exposure to the virus itself

The FCA also stresses that it expects firms to maintain the same quality of complaint handling. Firms are still expected to:

  • Inform customers of their complaint procedures and those of the Financial Ombudsman Service
  • Enable consumers to submit complaints via a variety of methods, although here the FCA recognises it may be necessary to give certain customers priority when it comes to the use of telephone lines, for example, customers who find it difficult to use digital communication channels
  • Acknowledge receipt of complaints
  • Co-operate fully with the FOS

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